Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except: (a) [reserved]; (i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000; (c) Permitted Investments and Investments that were Permitted Investments when made; (d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05; (e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity; (f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice; (g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements; (h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04); (i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll); (j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j); (k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000; (l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m); (m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default; (n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation; (o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations; (p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice; (q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower; (r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied; (s) Investments consisting of Restricted Payments permitted under Section 6.06; (t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers; (u) [reserved]; (v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04); (w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary; (x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement); (y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings; (z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice; (aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice; (bb) [reserved]; (cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc); (dd) [reserved]; (ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee); (ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing; (gg) [reserved]; and (hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Cerence Inc.)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person Person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business in connection with the cash management operations of the Company and the Subsidiaries) to or consistent with past practice)Guarantees of the obligations of, or make or permit to exist any investment or any other interest in (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), in any other Person, except:
(a) [reserved];
Investments (including, but not limited to, Investments in Equity Interests, intercompany loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by (i) Investments by the Borrower or any Subsidiary Loan Parties in the Equity Interests of the Borrower Foreign Borrowers or any Subsidiary (or any entity in Subsidiaries that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatare not Loan Parties in an aggregate amount, as at any date of determination, when combined with the aggregate outstanding principal amount of Revolving Facility Loans made to the Foreign Borrowers, not to exceed an amount equal to U.S.$100.0 million (valued at the time of the making thereof, thereof and at the time any Revolving Facility Loans are made to a Foreign Borrower and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) (plus any return of (A) Investments made after the Closing Date capital actually received by the respective investors in respect of investments previously made by them pursuant to this clause a(i)), (ii) Loan Parties pursuant to subclause in Domestic Loan Parties and (iiii) in Subsidiaries that are not Subsidiary Loan Parties in Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;.
(cb) Permitted Investments and Investments investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the Borrower Company or any Subsidiary of non-cash consideration for the Disposition sale of assets permitted under Section 6.05;
(ed) (i) loans and advances to, or Guarantees of Indebtedness of, officers, directors, to employees or consultants of the Borrower Company or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, U.S.$4.0 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fe) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(f) Swap Agreements permitted pursuant to Section 6.13;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, on the Closing Date and set forth on Part I of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount Investments set forth on Part II of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section Schedule 6.04);
(ih) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(ji) other Investments by the Borrower Company or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed U.S.$100.0 million (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 investments theretofore made by it pursuant to this paragraph (i));
(j) Investments constituting Permitted Business Acquisitions in an aggregate amount, which shall be deemed to include the principal amount of Indebtedness that is assumed pursuant to Section 6.01 in connection with such Permitted Business Acquisitions, not to exceed U.S.$125.0 million during any fiscal year of the Company (provided that (i) no such Dollar limitation shall apply so long as, at the time of making any such Investment and 0.50 times after giving effect thereto, (1) no Default or Event of Default has occurred and is continuing or would result therefrom and (2) the EBITDA Leverage Ratio shall be less than 3.00:1.00 calculated on a Pro Forma Basis for pro forma basis as of the then last day of the most recently ended Test Periodfiscal quarter in respect of which financial statements have been delivered pursuant to Section 5.04 and (ii) no such Dollar limitation shall apply to the Xxxxxx Acquisition); provided that if the portion of aggregate consideration for any Permitted Business Acquisition that constitutes an earn out or similar obligation shall not be considered an Investment pursuant to for purposes of this paragraph (j) or Indebtedness for purposes of Section 6.04(j) 6.12 until the fiscal quarter in which the same is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)earned;
(k) additional Investments constituting Permitted Acquisitions so long as immediately after giving effect may be made from time to such Permitted Acquisition, time to the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event extent made with proceeds of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time Equity Interests of the making thereofCompany, and without giving effect which proceeds or Investments in turn are contributed (as common equity) to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Party;
(l) Investments (including, but not limited to, Investments in Equity Interests, intercompany loans between Subsidiaries that are not Loan Parties loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by Subsidiaries that are not Domestic Loan Parties permitted by Section 6.01(m)in any Loan Party or other Subsidiary.
(m) Investments of Receivables Assets in a Special Purpose Receivables Subsidiary arising as a result of Permitted Receivables Financings and transactions and Investments arising as a result of one or more Permitted Supplier Finance Facilities;
(mn) the Transactions;
(o) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(np) Investments of a Subsidiary acquired after the Closing Date or of a person corporation merged into the Borrower Company or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(pq) Guarantees by the Borrower Company or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrowerbusiness;
(r) Investments a joint venture (including a non-majority owned joint venture) with, or a significant Investment in, a Chinese entity or a project or venture with such Chinese entity (in either case, in an aggregate principal amount not to exceed U.S.$50.0 million) involving a Subsidiary of the Company doing business in China, which venture may result in the Company no longer owning a majority of the Equity Interests of such Subsidiary or the Company or any of its Subsidiaries acquiring an interest in one or more newly formed persons that are received new joint venture entities arising in consideration of the contribution by the Borrower connection with such project or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedventure;
(s) joint ventures (including non-majority owned joint ventures) with, or significant Investments consisting of Restricted Payments permitted under Section 6.06in, entities or projects or ventures with such entities (in either case, in an aggregate principal amount not to exceed U.S.$50.0 million);
(t) Investments to investigate or remedy environmental conditions in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customersotherwise in an aggregate amount not exceeding U.S.$5.0 million and already accrued at March 31, 2010;
(u) [reserved]Loans, capital contributions and other Investments made subsequent to the Closing Date in connection with the Permitted Foreign Restructuring;
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);Capital expenditures; and
(w) advances the Company’s entry into (including payments of premiums in connection therewith), exercise of its rights and the form of a prepayment of expensesperformance thereof and thereunder, so long as such expenses are being paid Permitted Call Spread Swap Agreements in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofterms.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) (excluding for purposes of the calculation in this proviso any Investment made at a time when, immediately after giving effect thereto, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 2.72 to 1.00, which Investment shall be permitted under this Section 6.04(b) without regard to such calculation), shall not exceed the sum of (X) the greater of $15,000,00040,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition of assets permitted under Section 6.05;
(e) (i) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of Holdings, the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice not to exceed $20,000,000 in an the aggregate at any time outstanding amount (valued at the time of the making thereof, and calculated without giving effect regard to any subsequent change in value) not to exceed $10,000,000), (ii) in respect advances of payroll payments and expenses in the ordinary course of payments, business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred expenses and expenses to employees in the ordinary course of business or consistent with past practice and (iviii) in connection with such person’s purchase of Equity Interests of Holdings, the Borrower or any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fi) accounts receivable, security deposits and prepayments arising arising, and trade credit granted granted, in the ordinary course of business or consistent with past practice and business, (ii) any assets or securities received in satisfaction or partial satisfaction thereof of defaulted accounts receivable from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and (iii) any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Swap Agreements;
(h) Investments existing onon the Closing Date, or contractually committed as of, of the Closing Date Date, and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (rk), (s), (ee) and (llu);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (X) the greater of $50,000,000 100,000,000 and 0.50 0.29 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) any portion of the Available Free Cash Flow Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y), which such election shall be set forth in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Available Free Cash Flow Amount immediately prior to such election and the amount thereof elected to be so applied; provided, that no Event of Default has occurred and is continuing or would result therefrom and after giving effect thereto, and, plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (X); provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) Investments consisting of the licensing or contribution of intellectual property pursuant to joint marketing arrangements with other persons;
(m) intercompany loans and other Investments between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m6.01(l);
(mn) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property in each case in the ordinary course of business;
(o) Investments made in connection with the Transactions or pursuant to the Business Combination Agreement;
(p) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: First Lien Credit Agreement (Exela Technologies, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax Tax and accounting operations of the Borrower and the its Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices, including the payment of fees to, or obligation to reimburse, any Securitization Entity in respect of letters of credit issued to the account of such Securitization Entity for the benefit of the Borrower and its Subsidiaries), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, in each case, calculated net of any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect thereof, an “Investment”), except:
(a) [reserved]Investments in connection with the Transactions or any Reorganization;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.056.05 (other than by reference to this Section 6.04);
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of Parent, Holdings, the Borrower Borrower, any Parent Entity or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,00015,000,000 at any time outstanding, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings or Parent (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and and, to the extent such Investment is in an amount in excess of $5,000,000, set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (W) (1) the greater of $50,000,000 100,000,000 and 0.50 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test PeriodPeriod plus (X) any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(X) plus (Y) any portion of the Available Excluded Contribution Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) and plus (Z) without duplication, an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (W); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into or consolidated with the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, Parent, any Parent Entity, the Borrower or its Subsidiaries any Subsidiary in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings, Parent or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Financing Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of Holdings or any direct or indirect holding company of Holdings; provided, that the Borrowerissuance of such Equity Interests are not included in any determination of the Cumulative Credit, are not proceeds from the issuance of Permitted Cure Securities, and were not utilized under Sections 6.06(c) or 6.09(b)(i)(C);
(r) Investments to the extent specifically required under any Permitted Securitization Financing, including Investments of Securitization Assets specifically required in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or personsconnection with any Permitted Securitization Financing; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed no Investment may be made pursuant to this clause (r) shall not in for the aggregate exceed $10,000,000 and (ii) in respect purpose of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedfunding Retained Collections Contributions;
(s) Investments consisting of Restricted Payments permitted under Section 6.066.06 (other than by reference to this Section 6.04);
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved]to the extent constituting an Investment, any deposit of cash payable to or belonging to any Securitization Entity as required by and in accordance with any Permitted Securitization Documents;
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such any Subsidiary;
(x) Investments by the Borrower and its the Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of in Securitization Assets Entities pursuant to or arising as a result of in connection with any Permitted Securitization FinancingsFinancing;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising Investments in connection with the ordinary course acquisition of business or consistent with past practicelocations from franchisees;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. The Borrower will not, and will not permit any Restricted Subsidiary to, (i) Purchase (a) make or permit to remain outstanding any Investment in, (b) endorse, or otherwise be or become contingently liable, directly or indirectly, for the payment of money or the obligations, stock or dividends of, (c) own, purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity InterestsCapital Stock, obligations, evidences of Indebtedness indebtedness or securities of, or any other equity interest in (including any option, warrant or other securities right to acquire any of any other personthe foregoing), or (iid) make or permit to remain outstanding any loans or advances to or Guarantees of the Indebtedness of capital contribution to, any other person Person (other than in respect the Borrower or a Guarantor), or (ii) otherwise make, incur, create, assume or suffer to exist any Investment in any other Person (other than in the Borrower or a Guarantor), or purchase or acquire the assets of any other Person (Aother than in the Borrower or a Guarantor) intercompany liabilities incurred constituting a business unit (excluding, in connection with any event, the cash managementcontingent liability of a general partner for the obligations of its partnership arising under law due to the nature of its general partnership interest) (collectively, tax and accounting operations of "Restricted Investments"), except that:
(a) the Borrower and its Restricted Subsidiaries may make or permit to remain outstanding Restricted Investments to the extent within the prohibitions of, and permitted by, Sections 10.4 and 10.6;
(b) the Borrower or any Restricted Subsidiary may acquire and own stock, obligations or securities received in settlement of debts (created in the ordinary course of business) owing to the Borrower or any Restricted Subsidiary;
(c) the Borrower or any Restricted Subsidiary may own, purchase or acquire Cash Equivalents;
(d) the Borrower or any Restricted Subsidiary may permit to remain outstanding guarantees resulting from endorsement of instruments for collection in the ordinary course of business;
(e) the Borrower and its Restricted Subsidiaries and may make or permit to remain outstanding loans to employees (Bnot including payments covered by subsection (f) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of termsthis Section 10.5) and made in the ordinary course of business in an aggregate amount not to exceed at any time $4,000,000;
(f) the Borrower and its Restricted Subsidiaries may make or consistent with past practice)permit to remain outstanding payment by the Borrower of premiums on life insurance policies naming Georxx Xxxxxx xx insured as provided for in that certain Split-Dollar Agreement, dated November 25, 1994, among the Borrower, Georxx Xxxxxx xxx Davix Xxxxx, xx Co-Trustee, a copy of which has been delivered to the Agent, and payment by the Borrower of premiums on similar life insurance policies naming Davix Xxxxx, Xxchxxx Xxxxxxx xxx Jamex X. Xxxxxx xx insureds;
(g) the Borrower and the Restricted Subsidiaries may make or permit to remain outstanding intercompany loans and advances which are permitted under Section 10.2(d) hereof;
(iiih) purchase the Borrower and its Restricted Subsidiaries may make or otherwise acquire, permit to remain outstanding Investments in one transaction or a series of related transactions, (x) Unrestricted Subsidiaries; provided that all or substantially all such Investments of the property Borrower and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]its Restricted Subsidiaries shall be subject to Section 10.19;
(i) Investments by the Borrower and its Restricted Subsidiaries may make or any Subsidiary permit to remain additional outstanding Restricted Investments (other than the types of Restricted Investments permitted under Subsections (a) through (h) and (j) through (l) hereof) (including, without limitation, Restricted Investments in the Equity Interests Non-Guaranteeing Restricted Subsidiaries), provided that all such Restricted Investments of the Borrower or and its Restricted Subsidiaries shall not exceed in an aggregate amount at any Subsidiary (or any entity that will become a Subsidiary as a result time 7 1/2% of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any SubsidiaryConsolidated Net Worth; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, prior to and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to making such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contributionRestricted Investments, no Default or Event of Default shall have has occurred and be is continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause exist; further provided (i) if such Restricted Investment also constitutes an Acquisition as that term is defined under Section 10.13, such Restricted Investment will be governed by Section 10.13 hereof in lieu of this proviso remain satisfied;
Section 10.5, and (sii) Investments consisting if such Restricted Investment is in a Unrestricted Subsidiary, such Restricted Investment is governed by Section 10.5(h) hereof in lieu of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.0410.5(i);
(wj) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its SubsidiariesRestricted Subsidiaries may make or permit to remain outstanding Investments (excluding Acquisitions, including loans to any direct which shall be governed by Section 10.13) made by an exchange of stock for stock or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 stock for all purposes of this Agreement)assets;
(yi) Golden Moores Finance Company may make Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) Moorxx Xxxail Group Inc. pursuant to the extent constituting InvestmentsSubscription Agreement, purchases (ii) the Borrower may contribute shares of its Capital Stock to Golden Moores Company pursuant to the Combination Agreement, and acquisitions (iii) Golden Moores Company may make contributions to Moorxx Xxxail Group Inc. of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time Capital Stock of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date Borrower pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]Combination Agreement; and
(hh) Investments made (il) in connection with the exercise closing of any subscriptionsthe Related Facilities, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso Intercompany Credit Agreements, Golden Moores Finance Company may make a term loan to Moorxx Xxxail Group Inc. in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the principal amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 C$75,000,000 and Moorxx Xxxail Group Inc. may be made through intermediate Investments in Subsidiaries that are not Loan Parties make term loans to Golden Brand Clothing (Canada) Ltd. and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. Moorxx The amount of any Investment made other than Suit People Inc. in the form respective amounts of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower C$50,000,000 and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofC$25,000,000.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that (x) during the period commencing on the Amendment No. 3 Effective Date and ending on the last day of the Covenant Adjustment Period, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of new Investments made by the Borrower or any Subsidiary shall not exceed $10,000,000 and (y) if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, provided that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc)[reserved];
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee)[reserved];
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date; provided that, notwithstanding anything to the contrary in this Agreement, during the period commencing on the Amendment No. 3 Effective Date and ending on the last day of the Covenant Adjustment Period, no new Investments shall be made by a Loan Party in any Subsidiary that is not a Subsidiary Loan Party pursuant to Section 6.04(b). The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Cerence Inc.)
Investments, Loans and Advances. (i) Purchase Directly or indirectly, lend money or make advances to, or guarantee or assume any Indebtedness of, any person, or purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other obligations or securities of of, or any other interest in, or make any capital contribution to, any other person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the following shall be permitted:
(a) the Companies may consummate the Transactions in accordance with the provisions of the respective Transaction Documents;
(b) Investments in each Subsidiary of the Administrative Borrower outstanding on the Closing Date and other Investments outstanding on the Closing Date and identified on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivable, owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, utility and other similar deposits in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madebusiness;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets Hedging Obligations permitted under pursuant to Section 6.056.01(d);
(e) loans and advances to, or Guarantees of Indebtedness of, officers, to directors, employees or consultants and officers of the Administrative Borrower or and its Restricted Subsidiaries for bona fide business purposes and to purchase Equity Interests of the Administrative Borrower, in aggregate amount not to exceed $1,000,000 at any Subsidiary time outstanding; provided, that, no loans in violation of Section 402 of the Xxxxxxxx-Xxxxx Act shall be permitted hereunder;
(f) Investments by (i) any Loan Party in any other Loan Party, (ii) any Company in any Loan Party, and (iii) a Restricted Subsidiary of the Administrative Borrower that is not a Loan Party in any other Restricted Subsidiary of the Administrative Borrower that is not a Loan Party; provided, that, any Investment in the form of a loan or advance shall be evidenced by the Intercompany Note and, in the case of a loan or advance by a Loan Party, pledged by such Loan Party as Collateral pursuant to the Security Documents;
(g) Investments in securities of trade creditors or customers in the ordinary course of business that are received in settlement of bona fide disputes or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect pursuant to any subsequent change in value) not to exceed $10,000,000, (ii) in respect plan of payroll payments and expenses in reorganization or liquidation or similar arrangement upon the ordinary course of business bankruptcy or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount insolvency of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business creditors or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementscustomers;
(h) Investments existing on, or contractually committed as of, the Closing Date mergers and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as consolidations in existence on the Closing Date or as otherwise permitted by this compliance with Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)made by the Administrative Borrower or any Restricted Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 6.06;
(j) acquisitions of property in compliance with Section 6.07 (other than Section 6.07(a));
(k) Dividends in compliance with Section 6.08;
(l) Investments by of any person that becomes a Restricted Subsidiary after the Borrower date hereof pursuant to a Permitted Acquisition or other Investment permitted hereunder; provided, that, (i) such Investments exist at the time such person is acquired, (ii) such Investments are not made in anticipation or contemplation of such person becoming a Restricted Subsidiary, and (iii) such Investments are not directly or indirectly recourse to any of the Companies or any Subsidiary of their respective assets, other than to the person that becomes a Restricted Subsidiary;
(m) Guarantees constituting Indebtedness permitted by Section 6.01;
(n) Investments in Foreign Subsidiaries after the Closing Date in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed at any time the greater sum of $50,000,000 60,000,000 plus the amount of any cash and 0.50 times Cash Equivalents received from any Foreign Subsidiary after the EBITDA calculated on date hereof less any amounts Invested in a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment Foreign Subsidiary pursuant to this Section 6.04(j6.04(n) is made in any person that was not a Subsidiary on after the Closing Date so long as, as of the date on which of any such Investment was made but becomes a Subsidiary thereafterand after giving effect thereto, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and Payment Conditions are satisfied in each instance;
(o) so long as such person remains a Subsidiaryno Default then exists or would result therefrom, be deemed other Investments in an aggregate amount not to have been made pursuant to Section 6.04(bexceed $20,000,000 at any time outstanding; and
(p) (other Investments so long as the Payment Conditions are satisfied. Notwithstanding anything to the extent permitted by the proviso thereto contrary contained above in this Section 6.04, in no event shall any Borrower transfer any Receivables that are included in the case of Borrowing Base to any Subsidiary Guarantor or any other Subsidiary of the Administrative Borrower that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person in connection with cash management operations or (y) assets constituting not in connection with a business unitcash loan or advance) to or Guarantees of the obligations of, line or make or permit to exist any investment or any other interest (including any Equity Interests, indebtedness, securities, loans, advances, Guarantees, investments or interests purchased, acquired or made on or after the date of business or division of such this Agreement) in, any other person (each of the foregoingcollectively, an “InvestmentInvestments”), except:
(a) [reserved];
Investments (i) Investments existing on the date hereof in the Equity Interests of the Subsidiaries and (ii) by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; , provided that Investments made after the Restatement Date by the Borrower and the Subsidiary Loan Parties pursuant to clause (iiiii) of this paragraph
(a) in Subsidiaries that are not Loan Parties may be made in an aggregate amount (valued at the time of the making thereof and without giving effect to any write-downs or write-offs thereof), together with outstanding intercompany loans permitted under Section 6.04(d)(ii) and Guarantees subject to the proviso to Section 6.04(k) by Loan Parties of Indebtedness of Subsidiaries that are not Loan Parties, not to exceed $5,000,000 (plus any return of capital actually received by the respective investors in respect of Investments theretofore made by them pursuant to this paragraph (a));
(b) Permitted Investments and Investments that were Permitted Investments when made;
(c) Investments arising out of the receipt by the Borrower or any Subsidiary of noncash consideration for the sale of assets permitted under Section 6.05;
(d) intercompany loans from the Borrower and the Subsidiary Loan Parties to (i) the Borrower or any Subsidiary Loan Party and (ii) Subsidiaries that are not Loan Parties, provided that the aggregate principal amount of such intercompany loans made after the Restatement Date pursuant to clause (ii) at any time outstanding (together with Investments made pursuant to the proviso to Section 6.04(a)(ii) and Guarantees subject to the proviso to Section 6.04(k) by Loan Parties of Indebtedness otherwise permitted hereunder of Subsidiaries that are not Loan Parties), not to exceed $5,000,000;
(e) (i) loans and advances to employees of the Borrower or any Subsidiary; provided that, as the Subsidiaries in the ordinary course of business not to exceed $5,000,000 in the aggregate at any date time outstanding and (ii) advances of determinationpayroll payments and expenses to employees in the ordinary course of business;
(f) accounts receivable arising and trade credit granted in the ordinary course of business and any securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors and any prepayments and other credits made to suppliers in the ordinary course of business and consistent with past practice;
(g) Derivatives Obligations permitted pursuant to Section 6.14;
(h) Investments existing on the Restatement Date or made pursuant to commitments existing on the Restatement Date, in each case of the nature and amount, and in the persons, set forth on Schedule 6.04 plus additional Investments after the Restatement Date in such Persons in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower write-downs or any Subsidiary of nonwrite-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making offs thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased 25,000,000 at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04)outstanding;
(i) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(j) additional Investments by may be made from time to time to the Borrower extent made with proceeds of Equity Interests of or any Subsidiary in an aggregate outstanding amount capital contributions to (valued at the time excluding proceeds received as a result of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater exercise of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made Cure Rights pursuant to Section 6.04(b7.03) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)Borrower;
(k) Investments Guarantees constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted AcquisitionIndebtedness permitted by Section 6.01, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding principal amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) Indebtedness incurred after the Restatement Date of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party (together with Investments made pursuant to the proviso to Section 6.04(a)(ii) and Guarantees by Subsidiaries that are intercompany loans permitted under Section 6.04(d)(ii)) shall not Loan Parties permitted by Section 6.01(m)exceed $5,000,000;
(l) the Transactions;
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. The Borrower will not, and will not permit any Restricted Subsidiary to, (i) Purchase (a) make or permit to remain outstanding any Investment in, (b) endorse, or otherwise be or become contingently liable, directly or indirectly, for the payment of money or the obligations, stock or dividends of, (c) own, purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity InterestsCapital Stock, obligations, evidences of Indebtedness indebtedness or securities of, or any other equity interest in (including any option, warrant or other securities right to acquire any of any other personthe foregoing), or (iid) make or permit to remain outstanding any loans or advances to or Guarantees of the Indebtedness of capital contribution to, any other person Person (other than in respect the Borrower or a Guarantor), or (ii) otherwise make, incur, create, assume or suffer to exist any Investment in any other Person (other than in the Borrower or a Guarantor), (excluding, in any event, the contingent liability of a general partner for the obligations of its partnership arising under law due to the nature of its general partnership interest) (Acollectively, "Restricted Investments"), except that:
(a) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and its Restricted Subsidiaries may make or permit to remain outstanding Restricted Investments to the extent within the restrictions of, and permitted by, Sections 10.4 and 10.6;
(b) the Borrower or any Restricted Subsidiary may acquire and own stock, obligations or securities received in settlement of debts (created in the ordinary course of business) owing to the Borrower or any Restricted Subsidiary;
(c) the Borrower or any Restricted Subsidiary may own, purchase or acquire Cash Equivalents;
(d) the Borrower or any Restricted Subsidiary may make or permit to remain outstanding guarantees resulting from endorsement of instruments for collection in the ordinary course of business;
(e) the Borrower and its Restricted Subsidiaries and may make or permit to remain outstanding loans to employees (Bnot including payments covered by subsection (f) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of termsthis Section 10.5) and made in the ordinary course of business in an aggregate outstanding amount not to exceed at any time $4,000,000;
(f) the Borrower and its Restricted Subsidiaries may make or consistent with past practice)permit to remain outstanding payment by the Borrower of premiums on life insurance policies naming Xxxxxx Xxxxxx as insured as provided for in that certain Split-Dollar Agreement, dated November 25, 1994, among the Borrower, Xxxxxx Xxxxxx and Xxxxx Xxxxx, as Co-Trustee, a copy of which has been delivered to the Agent, and payment by the Borrower of premiums on similar life insurance policies naming Xxxxx Xxxxx and Xxxx Xxxx as insureds;
(g) the Borrower and the Restricted Subsidiaries may make or permit to remain outstanding intercompany loans and advances which are permitted under Section 10.2(c) hereof;
(iiih) purchase the Borrower and its Restricted Subsidiaries may make or otherwise acquire, in one transaction or a series permit to remain outstanding additional Restricted Investments (other than the types of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
Restricted Investments permitted under Subsections (a) [reserved];
through (g) and (i) hereof) (including, without limitation, Restricted Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity Unrestricted Subsidiaries), provided that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without after giving effect to any subsequent change in value) such Restricted Investments of (A) Investments the Borrower and its Restricted Subsidiaries made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) Available Amount shall not exceed $15,000,000;
(c) Permitted Investments be less than zero and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) Adjusted Available Amount shall not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other less than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodzero; provided that if any Investment pursuant that, prior to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to making such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contributionRestricted Investments, no Default or Event of Default shall have has occurred and be is continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause exist; and
(i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Restricted Subsidiaries may make or permit to remain outstanding Restricted Investments in Non-Guaranteeing Restricted Subsidiaries, including loans to any direct or indirect parent provided that all such Restricted Investments of the Borrower, if the Term Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that and the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments Guarantors made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto 50,000,000 in the case of any Subsidiary that is not a Loan Party) aggregate; provided that, prior to and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries immediately after giving effect to the applicable making such Restricted Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Default or Event of Default shall have has occurred and be continuing;
is continuing or would exist; provided if such Restricted Investment also constitutes an Acquisition as that term is defined under Section 10.13 (gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or an Acquisition of a Subsidiary Loan Party that is otherwise permitted Person simultaneously properly designated as an Unrestricted Subsidiary), such Restricted Investment will be governed by Section 10.13 hereof in lieu of this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof10.5.
Appears in 1 contract
Investments, Loans and Advances. Directly or indirectly, lend money or credit (iby way of guarantee or otherwise) Purchase or make advances to any person, or purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other obligations or securities of of, or any other interest in, or make any capital contribution to, any other person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the following shall be permitted:
(a) the Companies may consummate the Transactions in accordance with the provisions of the Transaction Documents;
(b) Investments outstanding on the Closing Date and identified on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, utility and other similar deposits in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madebusiness;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets Hedging Obligations permitted under pursuant to Section 6.056.01(c);
(e) loans and advances to, or Guarantees of Indebtedness of, officers, to directors, employees or consultants and officers of Borrower and the Subsidiaries for bona fide business purposes and to purchase Equity Interests of Holdings, in aggregate amount not to exceed $1,100,000 at any time outstanding; provided that, following an IPO of any Company, no loans in violation of Section 402 of the Xxxxxxxx-Xxxxx Act shall be permitted hereunder;
(f) Investments (i) by Borrower in Holdings or any Subsidiary Guarantor, including any entity that becomes a Subsidiary Guarantor in a Permitted Acquisition, (iii) by any Company in Borrower, Holdings or any Subsidiary Guarantor and (iii) by a Subsidiary of Borrower that is not a Subsidiary Guarantor in any other Subsidiary of Borrower that is not a Subsidiary Guarantor; provided that any Investment in the form of a loan or advance shall be evidenced by the Intercompany Note;
(g) Investments in securities of trade creditors or customers in the ordinary course of business or and consistent with such Company’s past practice practices that are received in an aggregate outstanding amount (valued at the time settlement of the making thereof, and without giving effect bona fide disputes or pursuant to any subsequent change in value) not to exceed $10,000,000, (ii) in respect plan of payroll payments and expenses in reorganization or liquidation or similar arrangement upon the ordinary course of business bankruptcy or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount insolvency of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business creditors or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementscustomers;
(h) Investments existing on, or contractually committed as of, the Closing Date mergers and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as consolidations in existence on the Closing Date or as otherwise permitted by this compliance with Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)made by Borrower or any Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 6.06;
(j) Investments by the Borrower or any Subsidiary Acquisitions of property in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this compliance with Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)6.07;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change Dividends in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000compliance with Section 6.08;
(l) intercompany loans between Subsidiaries Investments of any person that becomes a Subsidiary on or after the date hereof in an aggregate amount not to exceed $1,100,000 on the date such person becomes a Subsidiary; provided that (i) such Investments exist at the time such person is acquired, (ii) such Investments are not Loan Parties made in anticipation or contemplation of such person becoming a Subsidiary, and Guarantees by Subsidiaries that (iii) such Investments are not Loan Parties permitted by Section 6.01(m)directly or indirectly recourse to any of the Companies or any of their respective assets, other than to the person that becomes a Subsidiary;
(m) other Investments received in connection with an aggregate amount not to exceed $2,200,000 on the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or date such Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;are made; and
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Dateunsecured intercompany loans, in each case, (i) by any Company to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions Holdings evidenced by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries Intercompany Note for purposes and in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations amounts that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, be made as Dividends to Holdings pursuant to Sections 6.08(b)-(d); provided that the principal amount of any such Investment loans shall also reduce Dollar-for-Dollar the amounts that would otherwise be deemed permitted to be a Restricted Payment under the appropriate clause of Section 6.06 paid for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than purpose in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect Dividends pursuant to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofSection.
Appears in 1 contract
Samples: Second Lien Term Loan Agreement (Critical Homecare Solutions Holdings, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments to effect the Transactions;
(ib) Investments by the Borrower Borrower, any Guarantor or any Restricted Subsidiary in the Equity Interests of the Borrower Borrower, any Guarantor or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Restricted Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash non‑cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityBorrower;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (lljj);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed at the time made the sum of (X) the greater of $50,000,000 282,500,000 and 0.50 times 50.0% of Adjusted Consolidated EBITDA, plus (Y) so long as no Default or Event of Default shall have occurred and be continuing, any portion of the EBITDA calculated Available Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) in a Pro Forma Basis for written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail of the then most recently ended Test PeriodAvailable Amount immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X) or (Y); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger merger, amalgamation or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger merger, amalgamation or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(on) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (b), (e), (f), (g), (h), (i), (j) or (k) of the definition thereof, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qp) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value issuance of such assets, determined Equity Interests are not included in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer any determination of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedAvailable Amount;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(ur) [reserved];
non-cash Investments made in connection with tax planning and reorganization activities so long as, after giving effect thereto, the security interest of the Lenders in the Collateral, taken as a whole, is not materially impaired (v) Guarantees permitted under Section 6.01 (except to as determined by the extent such Guarantee is expressly subject to this Section 6.04Borrower in good faith);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xt) Investments by the Borrower and its the Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06(g) in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 6.06(g) for all purposes of this Agreement);
(yu) Investments consisting of Securitization transfers of Permitted Receivables Facility Assets or arising as a result of Permitted Securitization FinancingsQualified Receivables Facilities;
(zv) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits joint marketing or fees, arising in the ordinary course of business or consistent other similar arrangements with past practiceother persons;
(aaw) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bbx) [reserved];Investments, so long as, at the time any such Investment is made and immediately after giving effect thereto, (i) no Default or Event of Default shall have occurred and is continuing and (ii) the Total Leverage Ratio on a Pro Forma Basis is not greater than 2.50 to 1.00; and
(ccy) Investments in joint ventures; provided that the ventures or any Unrestricted Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in valuewrite-downs or write-offs thereof)not to exceed at the time made the sum of (X) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of (i) $40,000,000 141,250,000 and 0.40 times (ii) 25.0% of Adjusted Consolidated EBITDA and (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodamount originally invested) pursuant to clause (X); provided, that if any Investment pursuant to this Section 6.04(cc6.04(y) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(cc6.04(y);
. For purposes of determining compliance with this Section 6.04, (ddA) [reserved];
an Investment need not be permitted solely by reference to one category of permitted Investments (eeor any portion thereof) described in Sections 6.04(a) through (y) but may be permitted in part under any relevant combination thereof and (B) in the event that an Investment (or any portion thereof) meets the criteria of one or more of the categories of permitted Investments (or any portion thereof) described in Sections 6.04(a) through (y), the Borrower may, in its sole discretion, divide, classify or reclassify such Investment (or any portion thereof) in any Unrestricted Subsidiaries after giving effect manner that complies with this Section 6.04 and will be entitled to only include the applicable Investments, amount and type of such Investment (or any portion thereof) in an aggregate outstanding amount one or more (valued at the time as relevant) of the making above clauses (or any portion thereof, ) and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b(or any portion thereof) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used made or existing pursuant to only such clause or clauses (or any portion thereof); provided, that all Investments described in Schedule 6.04 shall be deemed outstanding under the other Related SectionSection 6.04(h). Any Investment in any person other than the Borrower or a Subsidiary Loan Party Guarantor that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, Fair Market Value thereof valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (write-downs or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination write-offs thereof.
Appears in 1 contract
Samples: Credit Agreement (Herman Miller Inc)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person Person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business in connection with the cash management operations of the Borrowers and the Subsidiaries) to or consistent with past practice)Guarantees of the obligations of, or make or permit to exist any investment or any other interest in (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), in any other Person, except:
(a) [reserved];
Investments (including, but not limited to, Investments in Equity Interests, intercompany loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by (i) Investments by the Borrower or any Subsidiary Loan Parties in the Equity Interests of the Borrower or any Subsidiary (or any entity Subsidiaries that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the are not Loan Parties in an aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of not to exceed an amount equal to (x) U.S.$100.0 million (plus any (A) return of capital actually received by the respective investors in respect of investments previously made by them pursuant to this clause a(i) and (B) Investments made after consisting of the conversion of Indebtedness owing by any such Subsidiary to the U.S. Borrower or a Domestic Subsidiary on the Closing Date by into Equity Interests of such Subsidiary, to the extent necessary to comply with “thin capitalization” or similar requirements under the laws of such Subsidiary’s jurisdiction of organization), plus (y) the portion, if any, of the Available Specified Basket Amount on the date of such election that the U.S. Borrower elects to apply to this Section 6.04(a), (ii) Loan Parties pursuant to subclause in other Loan Parties and (iiii) in Subsidiaries that are not Subsidiary Loan Parties in Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(cb) Permitted Investments and Investments investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the any Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(ed) (i) loans and advances to, or Guarantees of Indebtedness of, officers, directors, to employees or consultants of the U.S. Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, U.S.$5.0 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fe) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(f) Swap Agreements permitted pursuant to Section 6.13 and Capital Expenditures permitted pursuant to Section 6.10;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, on the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(ih) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(ji) other Investments by the any Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed (i) the greater of $50,000,000 U.S.$125.0 million and 0.50 times 10.00% of Consolidated Total Assets (plus any returns of capital actually received by the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment respective investor in respect of investments theretofore made by it pursuant to this Section 6.04(jparagraph (i)), plus (ii) is made in any person that was not a Subsidiary the portion, if any, of the Available Specified Basket Amount on the date on which such Investment was election is made but becomes a Subsidiary thereafter, then such Investment may, at that the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed U.S. Borrower elects to have been made pursuant apply to Section 6.04(bthis paragraph (i);
(j) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)Investments constituting Permitted Business Acquisitions;
(k) additional Investments constituting Permitted Acquisitions so long may be made from time to time to the extent made with proceeds of Equity Interests (excluding proceeds received as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time result of the making thereofexercise of Cure Rights pursuant to Section 7.03) of the U.S. Borrower, and without giving effect which proceeds or Investments in turn are contributed (as common equity) to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Party;
(l) Investments (including, but not limited to, Investments in Equity Interests, intercompany loans between Subsidiaries that are not Loan Parties loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by Subsidiaries that are not Loan Parties permitted by Section 6.01(m)in any Loan Party or other Subsidiary or any newly-created entity that becomes a Subsidiary;
(m) Investments arising as a result of Permitted Receivables Financings;
(n) the Transactions;
(o) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Dresser Inc)
Investments, Loans and Advances. Directly or indirectly, lend money or credit (iby way of guarantee, assumption of debt or otherwise) Purchase or make advances to any person, or purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other obligations or securities of of, or any other interest in, or make any capital contribution to, any other person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the following shall be permitted:
(a) [Intentionally Omitted];
(b) Investments outstanding on the Restatement Date and identified on Schedule 6.04(b);
(c) the Companies may (i) acquire, hold and dispose of accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, utility and other similar deposits in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madebusiness;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets Hedging Obligations permitted under pursuant to Section 6.056.01(c);
(e) loans and advances to, or Guarantees of Indebtedness of, officers, to directors, employees or consultants and officers of Borrower and the Subsidiaries for bona fide business purposes, in aggregate amount not to exceed $1,000,000 at any time outstanding; provided that no loans in violation of the Xxxxxxxx-Xxxxx Act (including Section 402 thereof) shall be permitted hereunder;
(f) Investments (i) by Borrower in any Subsidiary Guarantor, including any entity that becomes a Subsidiary Guarantor in a Permitted Acquisition, (ii) by any Company in Borrower or any Subsidiary Guarantor and (iiii) by a Subsidiary of Borrower that is not a Subsidiary Guarantor in any other Subsidiary of Borrower that is not a Subsidiary Guarantor; provided that any Investment in the form of a loan or advance shall be evidenced by the Intercompany Note;
(g) Investments in securities of trade creditors or customers in the ordinary course of business or and consistent with such Company’s past practice practices that are received in an aggregate outstanding amount (valued at the time settlement of the making thereof, and without giving effect bona fide disputes or pursuant to any subsequent change in value) not to exceed $10,000,000, (ii) in respect plan of payroll payments and expenses in reorganization or liquidation or similar arrangement upon the ordinary course of business bankruptcy or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount insolvency of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business creditors or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementscustomers;
(h) Investments existing onmergers, or contractually committed as of, the Closing Date consolidations and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as transactions in existence on the Closing Date or as otherwise permitted by this compliance with Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)made by Borrower or any Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 6.06;
(j) Acquisitions of property in compliance with Section 6.07;
(k) Dividends in compliance with Section 6.08;
(l) [Intentionally Omitted];
(m) Guarantees by Borrower or any Subsidiary of Indebtedness of Borrower or a Subsidiary of Indebtedness otherwise permitted under Section 6.01 (other than under Section 6.01(n)); and
(n) Investments made by the Borrower or any Subsidiary in any Permitted Joint Venture on or after the date hereof in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis 5,000,000 (for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which each such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option and related series of the Borrower, upon such person becoming a Subsidiary Investments) and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto $15,000,000 in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or personsaggregate; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect if permitted under the documents related to such contributionPermitted Joint Venture, no Default the equity held by any Company, or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed if not permitted, all proceeds and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except distributions payable to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such InvestmentPermitted Joint Venture, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time either case, shall be pledged to the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received Administrative Agent in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference a manner reasonably acceptable to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofthe Administrative Agent.
Appears in 1 contract
Samples: Credit Agreement (BioScrip, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments (x) by the Parent, any Borrower or any Subsidiary in the Equity Interests of any Subsidiary as of the Closing Date and (y) by the Parent, any Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result consisting of such Investment); (ii) intercompany loans from the Parent, any Borrower or any Subsidiary to the Borrower or Parent, any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder as of the Closing Date; provided that to the extent any such intercompany loan that is owing by a non-Subsidiary Loan Party to the Parent, any Borrower or any Subsidiary; provided that, as at Subsidiary Loan Party (the “Scheduled Loans”) (or any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) additional Investments made by the Parent, any Borrower or any Subsidiary Loan Party pursuant to this proviso) is repaid after the Closing Date or the Parent, any Borrower or any Subsidiary Loan Party receives, after the Closing Date, any dividend, distribution, interest payment, return of capital, repayment or other amount in respect of any scheduled Investment in the Equity Interests of any non-Subsidiary Loan Party (a “Return of Scheduled Equity”), then additional Investments may be made by the Parent, any Borrower or any Subsidiary Loan Party in any non-Subsidiary Loan Party in an aggregate amount up to the amount actually received by the Parent, any Borrower or any Subsidiary Loan Party after the Closing Date as payment in respect of such Investments; provided further that in no event will the aggregate amount of additional Investments made by the Parent, any Borrower or any Subsidiary Loan Party in non-Subsidiary Loan Parties pursuant to subclause this proviso exceed $5,000,000 in the aggregate; (iii) Investments in the Parent, any Borrower or any Subsidiary Loan Party; provided that all amounts owing by the Borrowers or any Guarantor to any Subsidiary that is not a Guarantor shall, within the time frame set forth on Schedule 5.12, be subordinated in right of payment to the Obligations pursuant to a subordination agreement substantially in the form of Exhibit F hereto or otherwise reasonably satisfactory to the Administrative Agent and a Borrower; (iii) Investments by any Subsidiary that is not a Borrower or Guarantor in any Subsidiary that is not a Borrower or Guarantor; (iv) [reserved]; (v) other intercompany liabilities amongst the Borrowers and the Guarantors incurred in the ordinary course of business; and (vi) other intercompany liabilities amongst Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside Guarantors incurred in the ordinary course of business after in connection with the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties cash management operations of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;such Subsidiaries.
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Parent, any Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Parent, any Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Part C of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (llii);
(j) other Investments by the Borrower Parent or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)5,000,000;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000[reserved];
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower Parent or a Subsidiary as a result of a foreclosure by the Borrower Parent or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower Parent or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, 6.04 and (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(on) acquisitions by the Parent, any Borrower or any Subsidiary of obligations of one or more officers or other employees of the Parent, any Borrower or its any of the Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerParent, so long as no cash is actually advanced by the any Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Parent, any Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (a), (b), (e), (f), (g), (i) or (l) of the definition thereof, in each case entered into by the Parent, any Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(p) [reserved];
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(vr) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower Parent or such Subsidiary;
(xt) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement)[reserved];
(yu) Investments consisting of Securitization Permitted Receivables Facility Assets or arising as a result of Permitted Securitization FinancingsQualified Receivables Facilities;
(zv) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits joint marketing or feesother similar arrangements with other persons, arising in each case in the ordinary course of business or consistent with past practice;business; and
(aaw) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Sectionbusiness. Any Investment in any person other than the Parent, a Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, Fair Market Value thereof valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change write-downs or write-offs thereof. Notwithstanding anything to the contrary set forth in valuethis Section 6.04, no material Investment may be made after the Closing Date pursuant to Section 6.04(b) by a Loan Party to a Subsidiary unless (i) all Equity Interests issued by such Subsidiary and held by Loan Parties constitute Collateral, (ii) a Borrower determines in good faith that such pledge of Equity Interests issued by such Subsidiary (1) could reasonably be expected to result in the Parent or any of its Subsidiaries incurring any material Tax or other cost (other than a de minimis cost) or any disruption in the operations or internal financing activities of the Parent and its Subsidiaries, (2) is not permitted by, or could reasonably be expected to cause any officers, directors or employees of the Parent or any of its Subsidiaries to become subject to related liabilities under any, applicable Requirement of Law or (iii) all Equity Interests issued by such Subsidiary and held by Loan Parties would constitute “Excluded Securities” pursuant to clause (c) of the definition thereof. The amount of Notwithstanding anything to the contrary set forth in this Section 6.04, no Loan Party shall make any Investment outstanding at in any time shall be Subsidiary (other than another Loan Party) if the original cost of consideration paid by such Investment, reduced by any returns Loan Party to such Subsidiary (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amountsother than a Loan Party) actually received in respect of such Investment constitutes Material Intellectual Property; provided that nothing in this sentence shall prohibit any non-exclusive (other than exclusive distribution or other similar within a specified jurisdiction) license or sublicense of Material Intellectual Property to, or use of Material Intellectual Property by, any Subsidiary in the ordinary course of business. Notwithstanding anything to the contrary set forth in this Section 6.04, no Loan Party shall, or shall permit any Subsidiary to, make any Investment in Mallinckrodt Petten Holdings B.V. other than solely amounts in cash required for such Investment. For purposes entity to pay its administrative expenses (including franchise or similar taxes) in the ordinary course of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofbusiness.
Appears in 1 contract
Samples: Superpriority Senior Secured Debtor in Possession Credit Agreement (Mallinckrodt PLC)
Investments, Loans and Advances. (i) Purchase Make any advance, loan, extension of credit or acquire (including pursuant to capital contribution to, or purchase any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other securities of or any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unitunit of, line of business or division of such person make any other investment (each of the foregoingan "Investment") in, an “Investment”)any Person, except:
(a) [reserved]Investments existing on the Closing Date and set forth on Schedule 6.03(a);
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; cash and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Cash Equivalents;
(c) Permitted Investments and Investments that were Permitted Investments when madeconstituting Capital Expenditures permitted pursuant to Section 6.11;
(d) Investments arising out extensions of trade credit in the receipt by the Borrower or any Subsidiary ordinary course of non-cash consideration for the Disposition of assets permitted under Section 6.05business;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directorsdirectors or employees of Parent or its Subsidiaries (i) for travel, entertainment and relocation expenses in the ordinary course of business, (ii) for other purposes in an aggregate amount for Parent and its Subsidiaries not to exceed $1,500,000 at any one time outstanding and (iii) relating to indemnification or reimbursement of any officers, directors or employees in respect of liabilities relating to their serving in any such capacity or consultants of the as otherwise specified in Section 6.07;
(f) Investments in Parent, either Borrower or any Subsidiary wholly owned Subsidiary;
(ig) Investments in the nature of pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or consistent with past practice otherwise described in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000Section 6.02(d), (iie) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementsi);
(h) Investments existing on, representing non-cash consideration received by Parent or contractually committed as of, any of its Subsidiaries in connection with any sale or other disposition of the Closing Date and set forth on Schedule 6.04 and property of Parent or any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise its Subsidiaries permitted by this Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f)by Parent or any of its Subsidiaries in one or more Persons in connection with joint ventures or similar arrangements in respect of which no other co-investor or other Person has a greater legal or beneficial ownership interest than Parent or such Subsidiary, in an aggregate amount, when added to the amount of Permitted Acquisitions made pursuant to paragraph (g)n) below, (o), (r), (s), (ee) and (ll)not to exceed $25,000,000 at any one time outstanding;
(j) Investments representing evidences of Indebtedness, securities or other property received from another Person in connection with any bankruptcy proceeding or other reorganization of such other Person or as a result of foreclosure, perfection or enforcement of any Lien or exchange for evidences of Indebtedness, securities or other property of such other Person, provided that any such securities or other property received by any Loan Party party to any Security Document is pledged to the Borrower or any Subsidiary in an aggregate outstanding amount (valued at Collateral Agent for the time benefit of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment Secured Parties pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)Security Documents;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect loans and advances to Management Investors in connection with the purchase by such Permitted AcquisitionManagement Investors of Capital Stock of Parent or any of its Subsidiaries of up to $10,000,000 outstanding at any time, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default such amount shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, reduced by the aggregate outstanding principal amount (valued at the time of the making thereof, and without giving effect to any subsequent change Indebtedness in value) respect of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned Guarantees permitted by Subsidiary Loan Parties shall not exceed $65,000,000Section 6.01(d)(ii);
(l) intercompany loans between Subsidiaries that are not Loan Parties Investments in the Capital Stock of Parent which (i) is held by Parent as treasury stock and Guarantees is restored to unissued status or is eliminated from authorized shares, or options in respect thereof or (ii) is purchased by Subsidiaries that are not Loan Parties permitted JCI in connection with the exercise of management stock options issued by Section 6.01(m)JCI to officers, directors and employees of Parent and its Subsidiaries;
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts Parent and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or its Subsidiaries under any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultHedging Agreements;
(n) Investments the acquisition of all or substantially all of the business or assets or the Capital Stock of any Person or any business unit thereof (a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date"Permitted Acquisition"), in each case, provided that:
(i) to the extent such acquisition, merger or consolidation acquisition is expressly permitted under this by Section 6.04, ; and
(ii) in the case of aggregate consideration (including cash and any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or Indebtedness assumed in connection with such acquisitionacquisitions) for all such acquisitions made pursuant to this paragraph (n), merger or consolidation and were in existence on when added to the date amount of such acquisitionInvestments permitted pursuant to paragraph (i) above, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or does not exceed $25,000,000 at any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, time outstanding; provided in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
that, (q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (iA) the fair market value target of such assetsacquisition has positive Consolidated EBITDA, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, calculated on a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately pro forma basis after giving effect to such contributionacquisition (such calculation to be made in a manner reasonably satisfactory to the Administrative Agent and to be evidenced by a certificate in form and substance reasonably satisfactory to the Administrative Agent signed by a Responsible Officer of each Borrower and delivered to the Administrative Agent (which shall promptly deliver copies to each Lender) at least three Business Days prior to the consummation of such acquisition) and (B) after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising occur as a result of Permitted Securitization Financingssuch acquisition;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cco) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, notes receivable and without giving effect to any subsequent changes other instruments and securities obtained in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent connection with transactions permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc6.05(d);; and
(ddp) [reserved];
(ee) additional Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made 10,000,000 at any one time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofoutstanding.
Appears in 1 contract
Samples: Credit Agreement (Jafra Cosmetics International Sa De Cv)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments to effect the Transactions;
(i) Investments (x) by the Borrower or any Subsidiary in the Equity Interests of any Subsidiary as of the Closing Date and, to the extent, individually, in excess of $75.0 million, set forth on Part A of Schedule 6.04 and (y) by the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result consisting of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any SubsidiarySubsidiary as of the Closing Date and, to the extent, individually, in excess of $75.0 million, set forth on Part B of Schedule 6.04; and provided, that
(iiiii) Guarantees to the extent (x) any intercompany loan permitted by the foregoing clause (i) that is owing by a non-Guarantor Subsidiary to the Borrower or any Guarantor (or any additional Investments made by the Borrower or any Guarantor pursuant to this proviso) is repaid after the Closing Date or (y) the Borrower or any Guarantor receives, after the Closing Date, any dividend, distribution, interest payment, return of capital, repayment or other cash amount in respect of any Investment in the Equity Interests of any non-Guarantor Subsidiary permitted by the foregoing clause (i) (a “Return of Indebtedness otherwise Equity”), the Borrower or any Subsidiary may make additional Investments in any non-Guarantor Subsidiary in an aggregate amount up to the amount actually received by the Borrower or any Guarantor after the Closing Date as payment in respect of such Investments; provided further that in no event will the aggregate amount of additional Investments made by the Borrower or any Guarantor in non-Guarantor Subsidiaries pursuant to this clause (ii) exceed the sum of the original principal amount of the intercompany loans permitted hereunder by the foregoing clause (i) on the Closing Date and the aggregate amount of Returns of Equity;
(iii) Investments in the Borrower or any Subsidiary; provided thatthat any Investment by the Borrower or any Guarantor in any Subsidiary that is not a Loan Party pursuant to this clause (iii) shall not exceed, as at any date of determination, when taken together with the aggregate amount for all other outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date pursuant to this clause (iii), the greater of $175.0 million and 43.75% of Adjusted Consolidated EBITDA on a Pro Forma Basis for the most recently ended Test Period; and
(iv) Investments by the Borrower or any Guarantor in any Subsidiary that is not a Loan Parties Party consisting solely of (x) the contribution or other Disposition of Equity Interests or Indebtedness of any other Subsidiary that is not a Loan Party held directly by the Borrower or such Guarantor in exchange for Indebtedness, Equity Interests (or additional share premium or paid in capital in respect of Equity Interests) or a combination thereof of the Subsidiary to which such contribution or other Disposition is made or (y) an exchange of Equity Interests of any other Subsidiary that is not a Loan Party for Indebtedness of such Subsidiary; provided, that immediately following the consummation of an Investment pursuant to subclause this clause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iiiv), plus (C) outstanding Guarantees by the Loan Parties Subsidiary whose Equity Interests or Indebtedness are the subject of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000such Investment remains a Subsidiary;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,00015.0 million, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityBorrower;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Part C of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (lljj);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 300.0 million and 0.50 times the 75.0% of Adjusted Consolidated EBITDA calculated on a Pro Forma Basis for the then most recently ended Test PeriodPeriod when made, plus (Y) so long as no Default or Event of Default shall have occurred and be continuing, any portion of the Available Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail of the amount of Available Amount immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Directly or indirectly, lend money or make advances to, or guarantee or assume any Indebtedness of, any person, or purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other obligations or securities of of, or any other interest in, or make any capital contribution to, any other person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the following shall be permitted:
(a) the Companies may consummate the Transactions in accordance with the provisions of the respective Transaction Documents;
(b) Investments in each Subsidiary of the Administrative Borrower outstanding on the Closing Date and other Investments outstanding on the Closing Date and identified on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivable, owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, utility and other similar deposits in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madebusiness;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets Hedging Obligations permitted under pursuant to Section 6.056.01(d);
(e) loans and advances to, or Guarantees of Indebtedness of, officers, to directors, employees or consultants and officers of the Administrative Borrower or and its Restricted Subsidiaries for bona fide business purposes and to purchase Equity Interests of the Administrative Borrower, in aggregate amount not to exceed $1,000,000 at any Subsidiary time outstanding; provided, that, no loans in violation of Section 402 of the Xxxxxxxx-Xxxxx Act shall be permitted hereunder;
(f) Investments by (i) any Loan Party in any other Loan Party, (ii) any Company in any Loan Party, and (iii) a Restricted Subsidiary of the Administrative Borrower that is not a Loan Party in any other Restricted Subsidiary of the Administrative Borrower that is not a Loan Party; provided, that, any Investment in the form of a loan or advance shall be evidenced by the Intercompany Note and, in the case of a loan or advance by a Loan Party, pledged by such Loan Party as Collateral pursuant to the Security Documents;
(g) Investments in securities of trade creditors or customers in the ordinary course of business that are received in settlement of bona fide disputes or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect pursuant to any subsequent change in value) not to exceed $10,000,000, (ii) in respect plan of payroll payments and expenses in reorganization or liquidation or similar arrangement upon the ordinary course of business bankruptcy or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount insolvency of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business creditors or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementscustomers;
(h) Investments existing on, or contractually committed as of, the Closing Date mergers and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as consolidations in existence on the Closing Date or as otherwise permitted by this compliance with Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)made by the Administrative Borrower or any Restricted Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 6.06;
(j) acquisitions of property in compliance with Section 6.07 (other than Section 6.07(a));
(k) Dividends in compliance with Section 6.08;
(l) Investments by of any person that becomes a Restricted Subsidiary after the Borrower date hereof pursuant to a Permitted Acquisition or other Investment permitted hereunder; provided, that, (i) such Investments exist at the time such person is acquired, (ii) such Investments are not made in anticipation or contemplation of such person becoming a Restricted Subsidiary, and (iii) such Investments are not directly or indirectly recourse to any of the Companies or any Subsidiary of their respective assets, other than to the person that becomes a Restricted Subsidiary;
(m) Guarantees constituting Indebtedness permitted by Section 6.01;
(n) Investments in Foreign Subsidiaries after the Closing Date in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed at any time the greater sum of $50,000,000 60,000,000 plus the amount of any cash and 0.50 times Cash Equivalents received from any Foreign Subsidiary after the EBITDA calculated on date hereof less any amounts Invested in a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment Foreign Subsidiary pursuant to this Section 6.04(j6.04(n) is made in any person that was not a Subsidiary on after the Closing Date so long as, as of the date on which of any such Investment was made but becomes a Subsidiary thereafterand after giving effect thereto, the Payment Conditions are satisfied in each instance;
(o) so long so no Default then such Investment mayexists or would result therefrom, other Investments in an aggregate amount not to exceed $20,000,000 at the option of the Borrower, upon such person becoming a Subsidiary and any time outstanding; and
(p) other Investments so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (the Payment Conditions are satisfied. Notwithstanding anything to the extent permitted by the proviso thereto contrary contained above in this Section 6.04, in no event shall any Borrower transfer any Receivables that are included in the case of Borrowing Base to any Subsidiary Guarantor or any other Subsidiary of the Administrative Borrower that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to or Guarantees of the Indebtedness of exist any other person (Investment in, any other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)Person, except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary and the Restricted Subsidiaries in the Equity Interests of the Borrower or any Subsidiary of the Guarantors;
(b) Cash Equivalents;
(c) Investments made (i) among or any entity that will become a Subsidiary as a result of such Investment)between the Borrower and the Guarantors; (ii) intercompany loans from by the Borrower or any Guarantor to any Restricted Subsidiary that is not a Guarantor in an aggregate amount at one time outstanding not to exceed $35,000,000 (plus additional Investments permitted to be made pursuant to clause (o) below); and (iii) by any Restricted Subsidiary that is not a Guarantor to the Borrower or any Subsidiaryof the Restricted Subsidiaries; provided that if such Investment is an intercompany loan or advance, any such loan or advance to a Loan Party shall be subordinated to such Loan Party’s Obligations hereunder and/or under the Guarantee and (iii) Guarantees Collateral Agreement and evidenced by the Borrower Intercompany Note and, in the case of a loan or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatadvance by a Loan Party, pledged by such Loan Party as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties Collateral pursuant to subclause the Security Documents;
(i) Investments consisting of extensions of credit in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course nature of business after accounts receivable or notes receivables arising from the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties grant of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) trade credit in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments againstwith, customers and suppliers, in each case the ordinary course of business;
(e) deposits, prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(nf) Investments of in any Person that is not a Subsidiary acquired after of the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing DateBorrower, in each case, (i) to the extent such acquisition, merger or consolidation is Person becomes a Restricted Subsidiary pursuant to a Permitted Acquisition;
(g) each Loan Party may make investments arising out of the receipt by such party of non-cash consideration for any Asset Sale permitted hereunder;
(h) guarantees and any other contingent obligations permitted under this Section 6.046.01(g);
(i) [Reserved];
(j) [Reserved];
(k) advances to officers, directors and employees of the Borrower and its Subsidiaries for travel, entertainment, relocation and analogous ordinary business purposes consistent with past practice;
(iil) in the case Permitted Acquisitions or other transactions permitted by Section 6.04 hereof;
(m) Investments of any acquisitionRestricted Subsidiary on the date it becomes a Restricted Subsidiary, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidationits becoming a Restricted Subsidiary;
(n) [Reserved];
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or personsInvestments; provided, provided that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated transaction on a Pro Forma Basis for Basis, the then most recently ended Test Period; provided, that if any Investment pursuant Total Net Leverage Ratio shall be less than 4.00 to this Section 6.04(cc1.00 and (ii) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio transaction on a Pro Forma Basis would Basis, Cash Liquidity shall not be less than $15,000,000;
(p) Investments of the Borrower and its Restricted Subsidiaries existing on the Closing Date and set forth in Schedule 6.03;
(q) Investments not to exceed 1.75 the Available Amount, if any, minus (without duplication of any amounts subtracted pursuant to 1.00clause (a)(iii)(X) of the definition of Available Amount) the aggregate amount of Restricted Payments made pursuant to Section 6.05(a)(v); provided that no Available Amount shall be used to make an Investment under this clause (q) at any time when there exists and is continuing a Default or Event of Default shall have occurred and be continuing;
(gg) [reserved]Default; and
(hhr) Investments made (i) in connection with the exercise of any subscriptionsresulting from, options, warrants, calls, puts or other rights or commitments pursuant deemed to agreements set forth exist on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sectionsaccount of, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties purchase and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by sale among the Borrower and may be its Restricted Subsidiaries of cellulosic and plastic casing product and cellulosic and plastic extrusion, production and finishing equipment and parts, in each case, on fair and reasonable terms to each party that is a Loan Party as reasonably determined either, at the option by each such Loan Party’s board of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofdirectors.
Appears in 1 contract
Investments, Loans and Advances. (i) 1. Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) 2. make any loans or advances to or Guarantees of the Indebtedness of any other person (other than loans or advances in respect of (A) a. intercompany current liabilities incurred in connection with the cash management, tax and accounting management operations of the Borrower Borrowers and the Subsidiaries and (B) b. intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) 3. purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) ii. 1. Investments by the Borrower Borrowers or any Subsidiary in the Equity Interests of the Borrower Borrowers or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) 2. intercompany loans from the Borrower Borrowers or any Subsidiary to the Borrower Borrowers or any Subsidiary; and (iii) 3. Guarantees by the Borrower Borrowers or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower Borrowers or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount of a. Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Fourth Restatement Effective Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) b. net outstanding intercompany loans made outside the ordinary course of business after the Closing Fourth Restatement Effective Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) c. outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Fourth Restatement Effective Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if excluding any Investment pursuant to this Section 6.04(j) is made in any person that was not at a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereaftertime when, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisitionthereto, the Total Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 3.75 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided), further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed the sum of (X) the greater of (1) $65,000,000;
150,000,000 and (l2) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with 15.0% of Consolidated Total Assets as at the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any end of the Subsidiaries with respect fiscal quarter ended immediately prior to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment Investment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to financial statements have been made delivered pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b5.04(a) or 5.04(b) plus (iiY) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The an amount of Investments that may be made at any time pursuant equal to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.;
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make capital contributions or any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) ), shall not exceed the sum of (X) the greater of $15,000,0005,000,000 and 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) with respect to any Investment made pursuant to clause (X), an amount equal to any returns of capital actually received in respect of any such Investment pursuant to clause (X) (not exceeding the amount of the original investment), it being understood and agreed that clause (Y) replenishes clause (X) and shall not create additional Investment capacity beyond the amount available under clause (X);
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $10,000,000, 5,000,000 and 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (j), (g), (o), (r), (s), (ee) and (ll);
(ji) during the Transition Period, other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $50,000,000, and (ii) from and after the greater end of $50,000,000 the Transition Period, other Investments by the Borrower or any Subsidiary so long as, immediately prior to, and 0.50 times pro forma for such Investment and any relayed transactions, the EBITDA Net Secured Leverage Ratio calculated on a Pro Forma Basis for the then most recently ended Test PeriodPeriod shall not exceed 3.75 to 1.00; provided that (A) if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but thereafter, pursuant to a separate and unrelated transaction, becomes a Subsidiary thereafterpursuant to an acquisition permitted under Section 6.04(k), then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and for so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Subsidiary Loan Party) and not in reliance on this Section 6.04(j), provided that, any Investment so deemed shall not replenish or otherwise increase the capacity available pursuant to Section 6.04(k) and (B) immediately prior to, and after giving effect to such Investment, no Default or Event of Default shall have occurred or be continuing or would result therefrom;
(k) Investments constituting Permitted Business Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite downs or write offs thereof) not to exceed the greater of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,00020,000,000 and 0.066 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied[reserved];
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06 in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under under, and subject to, the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings[reserved];
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice[reserved];
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved];Investments received substantially contemporaneously in exchange for Equity Interests of the Borrower; and
(cc) Investments in joint ventures; provided that (i) the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent changes in valuewrite-downs or write-offs thereof) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the sum of (X) the greater of $40,000,000 5,000,000 and 0.40 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; providedPeriod plus (Y) with respect to any Investment made pursuant to clause (X), an amount equal to any returns of capital actually received in respect of any such Investment pursuant to clause (X) (not exceeding the amount of the original investment), it being understood and agreed that clause (Y) replenishes clause (X) and shall not create additional Investment capacity beyond the amount available under clause (X), and (ii) if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but thereafter, pursuant to a separate and unrelated transaction, becomes a Subsidiary thereafterpursuant to an acquisition permitted under Section 6.04(k), then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and for so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Subsidiary Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments; provided that, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was so deemed shall not a Subsidiary on replenish or otherwise increase the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made capacity available pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee6.04(k);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents Permitted Investments shall be the fair market value thereof, which shall be thereof (as determined in good faith by the Borrower and may be determined either, at the option of the Borrower, in good faith) valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change write-downs or write-offs thereof. Notwithstanding anything herein to the contrary, prior to the date that the MUFG facility has been paid in value. The full and Redbox Entertainment and its Subsidiaries shall have become Guarantors and Subsidiary Loan parties hereunder and taken the actions with respect there under Section 5.10, (A) (i) the aggregate outstanding amount of any Investment outstanding at any time Investments made pursuant to this Section 6.04 in (x) non-Loan Party Subsidiaries (other than Redbox Entertainment, which shall be subject to the original cost limitations set forth in clauses (i)(y) and (i)(z), as applicable) shall not exceed $5,000,000 and (y) for so long as Redbox Entertainment is a Loan Party, Redbox Entertainment shall not exceed $20,000,000, (ii) the aggregate outstanding amount of such Investments in joint ventures made pursuant to this Section 6.04 shall not exceed $5,000,000 and (iii) all Investments made in (x) non-Loan Party Subsidiaries and joint ventures and (y) Redbox Entertainment (other than those intellectual property and film assets set forth on Schedule 1.01(D)) shall, in each case, consist of cash and/or Permitted Investments (provided that it is understood that any non-exclusive license of Intellectual Property not prohibited pursuant to Section 5.01(d) shall not constitute an Investment, reduced by any returns ) and (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income B) Redbox Entertainment and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need its Subsidiaries shall not be permitted solely by reference to one category of permitted make any Investments in any Affiliate thereof (other than the Borrower or any portion Subsidiary thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof).
Appears in 1 contract
Samples: Credit Agreement (Chicken Soup for the Soul Entertainment, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Wholly-Owned Subsidiary immediately prior to such merger, consolidation or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than loans or advances in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting management operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reservedReserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount of (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) (excluding any Investment made at a time when, after giving effect thereto, the Total Net First Lien Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00), shall not exceed the sum of (X) the greater of (1) $15,000,00055,000,000 and (2) 5.0% of Consolidated Total Assets as at the end of the fiscal quarter ended immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b) plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Holdings, Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,00016,500,000 and 1.5% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such loan or advance for which financial statements have been delivered pursuant to Section 5.04(a) or Section 5.04(b) in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings or any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityequity and shall not constitute any portion of the Cumulative Credit;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Swap Agreements that are not entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause paragraph (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Date);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (rp), (s), (eet), (ff) and (llkk);
(j) Investments by the Borrower or any Subsidiary in Similar Businesses in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 55,000,000 and 0.50 times 5.0% of Consolidated Total Assets as of the EBITDA calculated end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b) plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on a Pro Forma Basis for the then most recently ended Test Period; provided sale, repayments, income and similar amounts) actually received in respect of any such Investment provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto thereto, in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) other Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, by the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of Permitted Acquisitions (X) the greater of Subsidiaries that are not Subsidiary Loan Parties or $55,000,000 and 5.0% of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary Consolidated Total Assets as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect end of the fiscal quarter ended immediately prior to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment Investment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to financial statements have been made delivered pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.to
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person Person that is not a Wholly Owned Subsidiary Loan Party immediately prior to such merger, consolidation or amalgamation) any Equity InterestsCapital Stock, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other Person, except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as ofmade pursuant to a legally binding written commitment in existence on, the Closing Date and set forth on Schedule 6.04 and (ii) any extensionsmodification, renewalsreplacement, replacements renewal or reinvestments thereof, extension of any Investment described in clause (i) above so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above no such modification, renewal or extension increases the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required except by the terms of any such Investment or contractual commitment as in existence on the Closing Date thereof or as otherwise permitted by this Section 6.04)7.4;
(i) Investments resulting from pledges and deposits under Sections 6.02(f)existing on the Closing Date in the Loan Parties or any of their Subsidiaries, (g)ii) Investments made by any Loan Party in any other Loan Party, (o), (r), (s), (ee) and (ll);
(jiii) Investments made by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan PartyParty in any Loan Party or any Subsidiary and (iv) and Investments by any Loan Party in any wholly owned Subsidiary that is not a Loan Party in reliance on this an aggregate outstanding principal amount not to exceed $50,000,000;
(c) Guarantees permitted under Section 6.04(j7.1 (other than pursuant to Section 7.1(f));
(kd) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Swap Agreements permitted under Section 7.10;
(le) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m)Permitted Cash Equivalents;
(mf) Investments (i) constituting deposits, prepayments and/or other credits to suppliers, (ii) made in connection with obtaining, maintaining or renewing client and customer contracts and/or (iii) in the form of advances made to distributors, suppliers, licensors and licensees, in each case, in the ordinary course of business or, in the case of clause (iii) to the extent necessary to maintain the ordinary course of supplies;
(g) Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business;
(h) Investments (including Indebtedness and Capital Stock) received (i) in connection with the bankruptcy or reorganization of any Person, (ii) in settlement of delinquent obligations of, or settlement of delinquent accounts other disputes with, customers, suppliers and disputes with or judgments against, customers and suppliers, in each case other account debtors arising in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a business, (iii) upon foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments Investment or other transfer of title with respect to any secured Investment and/or (iv) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes;
(i) Investments consisting of the licensing of intellectual property rights pursuant to joint marketing arrangements with other Persons entered into in defaultthe ordinary course of business;
(j) loans and advances not to exceed $25,000,000 in the aggregate outstanding at any one time to officers, directors, employees and consultants of the Loan Parties and theirs Subsidiaries for reasonable and customary business-related travel, entertainment, relocation and analogous ordinary business purposes (including employee payroll advances);
(k) Investments constituting non-cash proceeds of Dispositions of assets to the extent received in a Disposition permitted by Section 7.5(e) or (s);
(l) Investments relating to decommission trusts and insurance and self-insurance organizations or arrangements in the ordinary course of business;
(m) Investments required to comply with any requirement of a Governmental Authority or a Requirement of Law;
(n) Investments in the form of, or pursuant to, operating agreements, working interests, royalty interests, mineral leases, processing agreements, farm-out agreements, contracts for the sale, transportation or exchange of a Subsidiary acquired after the Closing Date oil and natural gas or other fuel or commodities, unitization agreements, pooling agreements, area of a person merged into the Borrower mutual interest agreements, production sharing agreements or merged into other similar or consolidated with a Subsidiary after the Closing Datecustomary agreements, transactions, properties, interests or arrangements, and Investments and expenditures in connection therewith or pursuant thereto, in each case, (i) to the extent such acquisition, merger made or consolidation is permitted under this Section 6.04, (ii) entered into in the case ordinary course of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidationbusiness;
(o) acquisitions by the Borrower of obligations of one or more officers Investments in wind or other employees of the Borrower renewable energy projects or its Subsidiaries in connection with such officer’s any nuclear power or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or energy joint venture in an aggregate amount not to exceed $100,000,000 at any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;time outstanding; and
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate amount at any time outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made 150,000,000 (or the equivalent in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(eeother currency);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Senior Secured Debtor in Possession Credit Agreement (PACIFIC GAS & ELECTRIC Co)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Guarantees permitted by Section 6.01;
(b) (i) Investments by the Borrower or any Subsidiary Loan Party in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); Loan Party;
(ii) intercompany loans from the Borrower or Investments by any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made Loan Party in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of Loan Party or any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(kiii) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred other intercompany liabilities amongst Parent and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount its Subsidiaries (valued at the time of the making thereof, and without giving effect to any subsequent change in valueor solely amongst its Subsidiaries) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent in connection with past practice or the cash management operations of Parent and its Subsidiaries; and
(iv) (A) Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to Guarantor in any secured Investments or other transfer of title with respect to any secured Investment in default;
Subsidiary that is not a Loan Party (n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection together with the acquisition aggregate amount of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is investments made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borroweriv) of the assets so contributed and (zdefinition of “Permitted Acquisition”) that in an aggregate outstanding amount not to exceed the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances Non-Loan Party Investment Cap which shall be in the form of a prepayment contributions of expensescash, so long as such expenses are being paid in accordance with customary trade terms intercompany notes, loan agreements or other instruments, or accounts or other rights of payments related to any of the Borrower foregoing, or such Subsidiary;
(x) Investments by may take the Borrower and its Subsidiaries, including loans form of non-cash forgiveness or non-cash repurchases of Indebtedness of Parent to any direct Subsidiary or indirect parent of the Borrower, if the Borrower any Subsidiary to Parent or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint venturesSubsidiary; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date in cash pursuant to this Section 6.04(ccclause (A) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided20,000,000, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhB) Investments made (i) in connection with the exercise Shorts Acquisition (including Investments in connection with any reorganization transactions prior to or following the Shorts Acquisition to facilitate the consummation of any subscriptionsthe Shorts Acquisition or the integration of the target of the Shorts Acquisition), options, warrants, calls, puts (C) Investments in Short Brothers plc from time to time to finance its payment of levy or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at BEIS Agreement, including any time pursuant to payment in connection with the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election termination of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such InvestmentBEIS Agreement, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amountsD) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be Indebtedness permitted solely by reference to one category of permitted Investments (or any portion thereof) described in under Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.6.01(e);
Appears in 1 contract
Samples: Delayed Draw Bridge Credit Agreement (Spirit AeroSystems Holdings, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to Neither Borrower nor any merger with a person that is not a Wholly Owned Restricted Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) shall make any loans or advances to or Guarantees of Investment, except for the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), exceptfollowing:
(a) [reserved]Investments consisting of cash and Cash Equivalents at the time made;
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests advances to officers, directors and employees of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Restricted Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereoffor travel, entertainment, relocation and without giving effect to any subsequent change in value) not to exceed $10,000,000analogous ordinary business purposes, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practicebusiness, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such personPerson’s purchase of Equity Interests of the Borrower (or its direct or indirect parent) solely to the extent that the amount of such loans loan and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(hc) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 8.06(c) and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (hc) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04permitted);
(d) (i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary Loan Parties in an aggregate outstanding amount Loan Parties, (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(kii) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Restricted Subsidiaries that are not Loan Parties and Guarantees by in other Restricted Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
Parties, (miii) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Loan Parties in Restricted Subsidiaries that are not Loan Parties; provided that, other than with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Restricted Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration prohibited from becoming Guarantors by applicable Gaming Laws, the aggregate amount of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to Investments under this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cciii) shall not exceed the greater of $40,000,000 100,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option 1.50% of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Adjusted Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made Assets at any time pursuant to the proviso in Section 6.04(boutstanding and (iv) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased Investments by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Restricted Subsidiaries that are not Loan Parties in Loan Parties;
(e) (i) Investments consisting of extensions of credit in the nature of accounts receivable, notes receivable or other advances (including letters of credit and such intermediate cash collateral) arising from the grant of trade credit or similar arrangements with suppliers, distributors, tenants, licensors or licensees in the ordinary course of business, (ii) Investments shall be disregarded for purposes received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and (iii) Investments in securities of determining the outstanding amount of Investments trade creditors or customers received pursuant to any clause set forth above. The amount plan of any Investment made reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or in settlement of delinquent or overdue accounts in the ordinary course of business;
(f) Guaranty Obligations permitted by Section 8.04 (other than pursuant to clause (j) thereof) and guarantees of obligations not constituting Indebtedness;
(g) Investments in Swap Contracts permitted under Section 8.04(b);
(h) Investments in Income Properties and other Property ancillary or reasonably related to such Income Properties;
(i) Investments in Redevelopment Property, Development Property and undeveloped land (including, without duplication, Investments of the type described in clause (a) and clause (c) (with respect to Indebtedness) of the definition of “Investment” secured by any such property or utilized in the form redevelopment or development of cash such property) to be owned or cash equivalents shall be the fair market value thereof, which shall be determined in good faith leased by the Borrower or a Restricted Subsidiary and may be determined either, at the option Investments of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) type described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.in
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:assets
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,00020,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 to the Original Credit Agreement and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (X) the greater of $50,000,000 425,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y), which such election shall (unless such Investment is made pursuant to clause (a) of the definition of “Cumulative Credit”) be set forth in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date (including by means of a Delaware LLC Division) or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that the issuance of such Equity Interests are not included in any determination of the Cumulative Credit;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice[reserved];
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved]Investments received substantially contemporaneously in exchange for Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that the issuance of such Equity Interests are not included in any determination of the Cumulative Credit;
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) (excluding for purposes of the calculation in this proviso any Investment made at a time when, immediately after giving effect thereto, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00, which Investment shall be permitted under this Section 6.04(cc) without regard to such calculation) shall not exceed the sum of (X) the greater of $40,000,000 300,000,000 and 0.40 0.35 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved]Investments in Similar Businesses in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed the sum of (X) the greater of $300,000,000 and 0.35 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment pursuant to this Section 6.04(dd) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) and not in reliance on this Section 6.04(dd);
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes change in value) not to exceed the sum of (X) the greater of $15,000,000215,000,000 and 0.25 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment other Investments so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing;and
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing DateMerger Agreement. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b), 6.04(j) or Section 6.04(j6.04(dd) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be thereof (as determined in good faith by the Borrower and may be determined either, at the option of the Borrower, in good faith) valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, (A) an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) the above clauses but may be permitted in part under any combination thereof and (B) in the event that an Investment (or any portion thereof) meets the criteria of one or more of the categories of permitted Investments (or any portion thereof) described in the above clauses, the Borrower may, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such permitted Investment (or any portion thereof) in any manner that complies with this covenant and at the time of division, classification or reclassification will be entitled to only include the amount and type of such Investment (or any portion thereof) in one of the categories of permitted Investments (or any portion thereof) described in the above clauses. In the event that an Investment (or any portion thereof) is divided, classified or reclassified under Section 6.04(k), (cc) or (ff) (such clauses and related definitions, the “Investment Incurrence Clauses”), the determination of the amount of such Investment that may be made pursuant to the Investment Incurrence Clauses shall be made without giving pro forma effect to any substantially concurrent Investment (or any portion thereof) divided, classified or reclassified under any of the above clauses other than an Investment Incurrence Clause or the incurrence of Indebtedness to finance any such Investment (or any portion thereof).
Appears in 1 contract
Samples: Incremental Assumption and Amendment Agreement (Rackspace Technology, Inc.)
Investments, Loans and Advances. (i) Purchase Each of Parent and the Borrower will not, and will not permit any other Loan Party to, make or acquire (including pursuant permit to remain outstanding any Investments in or to any merger with a person Person, except that is the foregoing restriction shall not a Wholly Owned Subsidiary immediately prior to such mergerapply to:
(a) any Equity Interests, evidences of Indebtedness or other securities of any other person, Investments which are disclosed in Schedule 9.05;
(iib) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made accounts receivable arising in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000under Section 9.09;
(c) Permitted Investments in Cash Equivalents and Investments that were Permitted Investments Cash Equivalents when made;
(d) Investments arising out (i) made by the Parent in or to its Subsidiaries which are Loan Parties (or Persons that become Loan Parties substantially contemporaneously with such Investments), (ii) made by the Subsidiaries of the receipt Parent which are Loan Parties to each other and the Parent or (iii) made by any Loan Party in or to the Borrower Parent or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05to its Subsidiaries which are Loan Parties (or Persons that become Loan Parties substantially contemporaneously with such Investments);
(e) loans Subject to the limits in Section 9.06, Investments in direct ownership interests in additional Oil and advances toGas Properties and gas gathering systems related thereto or related to farm-out, farm-in, joint operating, joint venture or Guarantees area of Indebtedness ofmutual interest agreements, officersgathering systems, directorspipelines or other similar arrangements which are usual and customary in the oil and gas exploration and production business located, employees or consultants in each case, within the geographic boundaries of the Borrower United States of America;
(f) Investments pursuant to Swap Agreements otherwise permitted under this Agreement;
(g) loans or any Subsidiary (i) advances to employees, officers or directors of the Loan Parties in the ordinary course of business or consistent with past practice business, but in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) event not to exceed $10,000,0001,000,000 in the aggregate at any one time outstanding;
(h) Investments in stock, (ii) obligations or securities received in settlement of debts arising from Investments permitted under this Section 9.05 and accounts receivable owing to the Parent or any of its Subsidiaries as a result of a bankruptcy or other insolvency proceeding of the obligor in respect of payroll payments and expenses such debts or upon the enforcement of any Lien in favor of the Parent or any of its Subsidiaries; provided that the Borrower shall give the Administrative Agent prompt written notice in the ordinary course event that the aggregate amount of business all Investments held at any one time under this Section 9.05(h) exceeds $1,000,000;
(i) guarantees of Indebtedness permitted by Section 9.02 and guarantees by the Parent or consistent with past practiceany Subsidiary for the performance or payment obligations of the Parent or any other Loan Party, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, which obligations were incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is do not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)constitute Indebtedness;
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is constituting deposits made in any person that was not a Subsidiary on connection with the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option purchase of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto goods or services in the case ordinary course of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)business;
(k) subject to the limits in Section 9.06, Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition(including, without limitation, capital contributions) in general or limited partnerships or other types of entities (each a “venture”) entered into by the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00Borrower or the Parent with others in the ordinary course of business; provided that no Event (i) any such venture is engaged exclusively in oil and gas exploration, development, production, processing and related activities, including transportation, (ii) the interest in such venture is acquired on fair and reasonable terms and (iii) such venture interests acquired and capital contributions made (valued as of Default shall have occurred the date such interest was acquired or the contribution made) do not exceed, in the aggregate at any time outstanding an amount equal to $10,000,000 (net of the fair market value of any dividends, distributions, and be continuing; providedreturn of capital received by the applicable Loan Party in respect of Investments previously made pursuant to this clause) so long as, further, that, if immediately both before and after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00there is no Default, the aggregate outstanding amount (valued at the time Event of the making thereof, Default or Borrowing Base Deficiency that has occurred and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000is continuing;
(l) intercompany loans between Subsidiaries that are not Loan Parties pledges and Guarantees by Subsidiaries that are not Loan Parties deposits of cash expressly permitted by Section 6.01(m);9.03; and
(m) other Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case not to exceed $10,000,000 in the ordinary course aggregate at any time at any one time outstanding (net of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assetsany dividends, determined in good faith distributions, and return of capital received by the Borrower, so contributed applicable Loan Party in respect of Investments previously made pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04clause);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Senior Secured Revolving Credit Agreement (Goodrich Petroleum Corp)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestscapital stock, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to exist any investment or Guarantees of the Indebtedness of any other person (interest in, any other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)person, except:
(a) [reserved]investments by Parent, the Borrowers or the Specified Sub- sidiaries existing on the date hereof in the capital stock of their respective subsidiaries;
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Permitted Investments;
(c) Permitted Investments advances and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt loans made by the Borrower or any Specified Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) to Parent in the ordinary course of business or consistent with past practice in an aggregate outstanding amount and (valued at the time of the making thereof, i) advances and without giving effect loans made by any Specified Subsidiary to any subsequent change in value) not to exceed $10,000,000, and (ii) investments made by any Specified Subsidiary in respect any other Subsidiary that is a Borrower or a Subsidiary Guarantor in the ordinary course of payroll payments business, PROVIDED that (A) both such Subsidiaries are members of the same Significant Subsidiary Group or (B) neither of such Subsidiaries is a member of any Significant Subsidiary Group;
(d) advances and expenses loans made by Parent to any Borrower in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gge) [reserved]; andthe investment by Parent existing on the date hereof in the capital stock of Xxxxxx Holdings, Inc., a Delaware corporation.
(hhf) Investments investments by any Borrower or any Specified Subsidiary (other than First-Tier Subsidiaries) made pursuant to joint venture or franchise arrangements entered into in accordance with prudent business practice and in an aggregate amount of not more than $5,000,000 at any one time outstanding;
(g) non-cash consideration received from any sale, lease, transfer or other disposition of assets permitted under Section 6.05;
(h) loans or advances to employees made in the ordinary course of business consistent with prudent business practice and in an aggregate amount not to exceed $2,500,000 at any one time outstanding;
(i) loans or advances to or investments in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant Liquor License Affiliates to the proviso extent necessary to enable Liquor License Affiliates to pay taxes, fees and other expenses as and when required to maintain the liquor licenses held by them in Section 6.04(ban aggregate amount not to exceed $100,000;
(j) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is additional investments not otherwise permitted by this Section 6.04 may be made 6.04, in an aggregate amount not to exceed $3,000,000;
(k) subject to Section 6.10, acquisitions of restaurant properties and related assets by means of investments in new operations, properties or franchises through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes the purchase or other acquisition of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount assets of any Investment person or stock of new Subsidiaries where any Borrower or any Specified Subsidiary making such purchase or acquisition determines in its prudent business judgment that such purchase or acquisition would be beneficial in lieu of making Consolidated Capital Expenditures; and
(l) investments made other than by Parent in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined FRD in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect an aggregate amount not to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding exceed $75,000,000 at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofoutstanding.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities investments, loans or advances incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or and consistent with past practice)practices of Holdings and the Subsidiaries) to or Guarantees of the obligations of, or make or permit to exist any investment in (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person, except:
(a) [reserved]Guarantees by Parent or any Subsidiary of operating leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by Parent or any Subsidiary in the ordinary course of business;
(b) (i) Investments by the Borrower Parent or any Subsidiary in the Equity Interests Interests, evidence of the Borrower Indebtedness or other securities of Parent or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower Parent or any Subsidiary to the Borrower Parent or any Subsidiary; and (iii) Guarantees by the Borrower Parent or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of the Borrower Parent or any Subsidiary; provided that, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries (other than Parent) that are not Non-Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries (other than Parent) that are not Non-Subsidiary Loan Parties pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries (other than Parent) that are not Non-Subsidiary Loan Parties pursuant to subclause clause (iii) (other than, in each case, to the extent such Investments, Loans or Guarantees are made (1) by any subsidiary of Parent that is a Non-Subsidiary Loan Party or (2) by a Non-Subsidiary Loan Party in or to another Non-Subsidiary Loan Party) shall not exceed an aggregate amount equal to the greater of $15,000,00050.0 million and 5.0% of Consolidated Total Assets (plus any return of capital actually received by the respective investors in respect of investments theretofore made by them pursuant to this paragraph (b)), plus (y) the portion, if any, of the Available Investment Basket Amount on the date of such election that Holdings elects to apply to this Section 6.04(b));
(c) Permitted Investments and Investments investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (New Skies Satellites Holdings Ltd.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger or amalgamation with a person that is not a Wholly Owned Subsidiary immediately prior to such mergermerger or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practicepractice or industry norm), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of Holdings, any Parent Entity, the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice or industry norm in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practicepractice or industry norm, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice or industry norm and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Borrower, Holdings or any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and arising, trade credit granted and Customer Development Agreements (and Customer Notes issued thereunder) or prepayments to suppliers or loans or advances made to distributors in the ordinary course of business or consistent with past practice or industry norm and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers or customers made in the ordinary course of business or consistent with past practicepractice or industry norm;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and (provided, that any such Investment that is in excess of $2,500,000 shall be set forth on Schedule 6.04 6.04) and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee), (ll) and (lloo);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. Directly or indirectly, lend money or credit (iby way of guarantee or otherwise) Purchase or make advances to any person, or purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other obligations or securities of of, or any other interest in, or make any capital contribution to, any other person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract (all of the foregoing, collectively, "INVESTMENTS"), except that the following shall be permitted:
(a) [Reserved];
(b) Investments outstanding on the Closing Date and identified on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property utility and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower other similar deposits or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets other deposits permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers6.02, in each case in the ordinary course of business;
(d) Hedging Obligations incurred pursuant to Section 6.01(c);
(e) loans and advances to directors, employees and officers of Borrower and the Subsidiaries for bona fide business purposes and to purchase Equity Interests of Borrower, in aggregate amount not to exceed $5,000,000 at any time outstanding;
(f) Investments (i) by Borrower in any Guarantor, (ii) by any Company in Borrower or consistent with past practice any Guarantor, (iii) by a Guarantor in another Guarantor and (iv) by a Subsidiary that is not a Guarantor in any other Subsidiary that is not a Guarantor; provided that any Investment in the form of a loan or Investments acquired advance owed to a Loan Party by a Loan Party shall be evidenced by the Intercompany Note and, in the case of a loan or advance by a Loan Party, pledged by such Loan Party as Collateral pursuant to the Security Documents;
(g) Investments in securities of trade creditors or customers in the ordinary course of business received in settlement of a bona fide dispute or judgment or upon foreclosure or pursuant to any plan of reorganization or liquidation or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers;
(h) Investments made by Borrower or a Subsidiary any Guarantor as a result of a foreclosure by the consideration received in connection with an Asset Sale made in compliance with Section 6.06;
(i) Investments of Borrower or any Guarantor in HMO Subsidiaries outstanding on the Closing Date and Investments by Borrower or any Guarantor in HMO Subsidiaries made after the Closing Date in an aggregate amount not to exceed (i) $5,000,000 plus the amount dividended, distributed or otherwise paid to any Loan Party by an HMO Subsidiary that are reinvested in a different HMO Subsidiary within 180 days of such dividend, distribution or other payment plus (ii) other amounts as required by applicable Requirements of Law (including minimum capital requirements);
(j) Permitted Acquisitions (and Investments owned by the acquired person at the time of such Permitted Acquisition), to the extent permitted by Section 6.07(f);
(A) Required Advances, (B) RS Advances and (C) other advances to Contract Providers in an amount not to exceed $1,000,000 at any time outstanding;
(l) other Investments for less than 50% of the Subsidiaries with respect Equity Interests of any person made by Borrower or any Guarantor in an aggregate amount not to exceed the amount of any secured Investments or issuances of Qualified Capital Stock attributed therefor, at any time outstanding;
(m) guarantees and other transfer of title with respect to any secured Investment in defaultContingent Obligations permitted under Section 6.01;
(n) Investments that constitute an increase in value of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidationexisting Investments;
(o) acquisitions by the Borrower of obligations of one Loan Parties may cancel, forgive, set-off or more officers accept prepayments with respect to Indebtedness or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of obligations owed to them and/or their Equity Interests of to the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligationsextent not otherwise prohibited hereunder;
(p) Guarantees any Company may capitalize or forgive any Indebtedness owed to it by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicea Loan Party;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrowerpledges and deposits permitted under Section 6.02;
(r) Investments consisting of xxxxxxx money required in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, connection with a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedPermitted Acquisition;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;in deposit accounts; and
(t) other Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments made by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, Guarantor in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made 10,000,000 at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofoutstanding.
Appears in 1 contract
Investments, Loans and Advances. Directly or indirectly, lend money or credit (iby way of guarantee or otherwise) Purchase or make advances to any person, or purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other obligations or securities of of, or any other interest in, or make any capital contribution to, any other person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract other than, in any case, investments in Cash Equivalents in the ordinary course of business (all of the foregoing, collectively, "Investments"), except that the following shall be permitted:
(a) the Companies may consummate the Transactions in accordance with the provisions of the Transaction Documents and consummate the Restructuring on or after the Closing Date;
(b) Investments outstanding on the Closing Date and identified on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, utility and other similar deposits in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madebusiness;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Hedging Obligations incurred pursuant to Section 6.056.01(c);
(e) loans and advances to, or Guarantees of Indebtedness of, officers, to directors, employees or consultants and officers of Borrower and the Subsidiaries for bona fide business purposes and to purchase Equity Interests of Borrower, in aggregate amount not to exceed $1.0 million at any time outstanding; provided that no loans in violation of Section 402 of the Sarbanes-Oxley Act shall be permitted hereunder;
(f) Investmxxxx (x) xx xxy Company in Borrower or any Subsidiary Guarantor or any person that will become a Subsidiary Guarantor pursuant to the terms hereof at the time of making such Investment, (iii) by a Subsidiary that is not a Subsidiary Guarantor in any other Subsidiary that is not a Subsidiary Guarantor, (iii) by any Company in any Foreign Subsidiary that are evidenced by the Foreign Intercompany Notes and (iv) by any Loan Party in any Foreign Subsidiary in aggregate amount not to exceed $15.0 million for all Loan Parties at any time outstanding; provided that any Investment in the form of a loan or advance to a Loan Party shall be evidenced by the Intercompany Note and, in the case of a loan or advance by a Loan Party to any other Loan Party, pledged by such Loan Party as Collateral pursuant to the Security Documents;
(g) Investments in securities of trade creditors or customers in the ordinary course of business received upon foreclosure or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect pursuant to any subsequent change in value) not to exceed $10,000,000, (ii) in respect plan of payroll payments and expenses in reorganization or liquidation or similar arrangement upon the ordinary course of business bankruptcy or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount insolvency of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business creditors or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementscustomers;
(h) Investments existing on, made by Borrower or contractually committed any Subsidiary as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount a result of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to consideration received in connection with an increase as required by the terms of any such Investment or contractual commitment as Asset Sale made in existence on the Closing Date or as otherwise permitted by this compliance with Section 6.04)6.06;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)made in compliance with Section 6.07;
(j) subject to the terms of this Agreement, the creation of any Subsidiary;
(k) Investments by in Affiliates which do not constitute Subsidiaries as in effect on the Borrower or any Subsidiary Closing Date and additional Investments in such Affiliates which do not constitute Subsidiaries in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10.0 million at any time outstanding; and
(l) other Investments in an aggregate amount not to exceed $10.0 million at any time outstanding. If, as a result of the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if Restructuring, any Investment pursuant to this Section 6.04(j) is made that results in any person that was not Collateral being transferred to a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) , such Collateral shall be transferred free and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions clear of the Liens created by the Security Documents, and, so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default Borrower shall have occurred and be continuing; provided, further, that, if immediately after giving effect provided the Agents such certifications or documents as any Agent shall reasonably request in order to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection demonstrate compliance with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisitionAgents shall take all actions they deem appropriate and all actions reasonably required by Borrower, merger or consolidationand solely at Borrower's expense, in accordance with Section 6.05 and (iii) order to effect the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofforegoing.
Appears in 1 contract
Investments, Loans and Advances. The Borrower will not (i) Purchase directly or acquire (including pursuant indirectly through any Restricted Subsidiary), and will not allow or suffer any Restricted Subsidiary to, make or permit to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make remain outstanding any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of termscredit to, or purchases or other acquisitions of capital stock or ownership (direct or beneficial) interests or obligations of, or other investments in, any Person (including without limitation any Subsidiary), except for:
(a) Investments in cash, cash equivalents, and readily marketable direct obligations of the United States of America or any agency thereof.
(b) Investments in certificates of deposit of maturities less than one year issued by banks satisfactory to Lender.
(c) Investments in commercial paper of maturities less than one year with the best rating by Standard & Poors, Xxxxx’x Investors Service, Inc., or any other rating agency reasonably satisfactory to the Lender.
(d) Advances and loans to employees and officers made in the ordinary course of business or consistent with past practice)not exceeding in the aggregate $10,000 for all such advances and loans.
(e) Advances pursuant to operating agreements, or (iii) purchase or otherwise acquireunitization and pooling agreements and orders, farmout agreements and gas balancing agreements, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary case that are customary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; oil, gas and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, mineral production business and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside entered into in the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;business.
(cf) Permitted Investments and Investments that were Permitted Investments when made;Ownership of equity interests in Restricted Subsidiaries.
(dg) Investments arising out of the receipt Loans and advances made by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) to its Restricted Subsidiaries in the ordinary course of business to be used in the normal business operations of such Restricted Subsidiary. (However, nothing in this Section modifies or consistent with past practice in an aggregate outstanding amount (valued at overrides the time limitation on use of proceeds of the making thereof, and without giving effect to any subsequent change Loan in valueSection 2.7.).
(h) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses Accounts receivables created or acquired in the ordinary course of business or consistent with past practice, business.
(iiii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) Investments in connection with such person’s purchase of Equity Interests of Permitted Hedging Agreements incurred under the Borrower solely to Hedging Program approved by the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;Lender.
(fj) accounts receivable, security deposits Repurchases of non vested options and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments Herlin pursuant to this clause (hHerlin’s existing founder common stock purchase agreement attached hereto as Exhibit 6.3(j) is not increased at any time above the amount of such Investment existing or committed as in effect on the Closing Date (other than without consideration of any amendments thereto made without the Lender’s written consent), solely pursuant to an increase the Repurchase Option (as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this defined therein) under Section 6.04);
(i3(a) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and but excluding other purchases thereunder including without giving effect to any subsequent change in valuelimitation purchases under the Right of First Refusal under Section 3(b) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);thereof.
(k) Investments constituting Permitted Acquisitions so long in (x) Unrestricted Subsidiaries or (y) Persons who derive substantial revenue from operations similar or ancillary to the Borrower’s business as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued conducted at the time of such Investment, provided that the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) total Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cck) shall not exceed the greater of (A) $40,000,000 and 0.40 times 100,000.00 or (B) the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option total of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been aggregate net proceeds from equity offerings made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount Date plus proceeds from issuances of Investments that may be subordinate Debt made at any time pursuant to after the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties Closing Date and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereoftime.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments to effect the Transactions;
(b) (i) Investments (x) by the Parent, any Borrower or any Subsidiary in the Equity Interests of any Subsidiary as of the Closing Date and set forth on Part A of Schedule 6.04 and (y) by the Parent, any Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result consisting of such Investment); (ii) intercompany loans from the Parent, any Borrower or any Subsidiary to the Borrower or Parent, any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder as of the Closing Date and set forth on Part B of Schedule 6.04; provided that to the extent any such intercompany loan that is owing by a non-Subsidiary Loan Party to the Parent, any Borrower or any SubsidiarySubsidiary Loan Party (the “Scheduled Loans”) (or any additional Investments made by the Parent, any Borrower or any Subsidiary Loan Party pursuant to this proviso) is repaid after the Closing Date or the Parent, any Borrower or any Subsidiary Loan Party receives, after the Closing Date, any dividend, distribution, interest payment, return of capital, repayment or other amount in respect of any scheduled Investment in the Equity Interests of any non-Subsidiary Loan Party (a “Return of Scheduled Equity”), then additional Investments may be made by the Parent, any Borrower or any Subsidiary Loan Party in any non-Subsidiary Loan Party in an aggregate amount up to the amount actually received by the Parent, any Borrower or any Subsidiary Loan Party after the Closing Date as payment in respect of such Investments; provided that, as at any date of determination, further that in no event will the aggregate outstanding amount (valued at of additional Investments made by the time Parent, any Borrower or any Subsidiary Loan Party in non-Subsidiary Loan Parties pursuant to this proviso exceed the sum of the making thereoforiginal principal amount of the Scheduled Loans on the Closing Date and the aggregate amount of Returns of Scheduled Equity; (ii) Investments in the Parent, and without giving effect any Borrower or any Subsidiary Loan Party; provided that all amounts owing by the Borrowers or any Guarantor to any subsequent change Subsidiary that is not a Guarantor shall be subordinated in valueright of payment to the Obligations pursuant to a subordination agreement substantially in the form of Exhibit F hereto or otherwise reasonably satisfactory to the Administrative Agent and the Lux Borrower; (iii) of Investments by any Subsidiary that is not a Borrower or Guarantor in any Subsidiary that is not a Borrower or Guarantor; (Aiv) Investments by the Parent, any Borrower or any Subsidiary Loan Party in any Subsidiary that is not a Borrower or Guarantor in an aggregate amount for all such outstanding Investments made after the Closing Date by not to exceed the Loan Parties pursuant to subclause greater of $200,000,000 and 6.0% of Consolidated Total Assets when made; (iv) other intercompany liabilities amongst the Borrowers and the Guarantors incurred in the ordinary course of business; (vi) other intercompany liabilities amongst Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside Guarantors incurred in the ordinary course of business after in connection with the Closing Date cash management operations of such Subsidiaries; and (vii) Investments by the Loan Parties to Subsidiaries that are not Parent or any Subsidiary Loan Parties Party in any Subsidiary that is not a Loan Party consisting solely of (x) the contribution or other Disposition of Equity Interests or Indebtedness of any other Subsidiary that is not a Loan Party held directly by the Parent or such Subsidiary Loan Party in exchange for Indebtedness, Equity Interests (or additional share premium or paid in capital in respect of Equity Interests) or a combination thereof of the Subsidiary to which such contribution or other Disposition is made or (y) an exchange of Equity Interests of any other Subsidiary that is not a Loan Party for Indebtedness of such Subsidiary; provided that immediately following the consummation of an Investment pursuant to subclause preceding clause (iix) or (y), plus (C) outstanding Guarantees by the Loan Parties Subsidiary whose Equity Interests or Indebtedness are the subject of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;such Investment remains a Subsidiary.
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Parent, any Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Parent, any Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,00020,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Parent solely to the extent that the amount of such loans and advances shall be contributed to the Borrower Parent in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Part C of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (llii);
(j) other Investments by the Borrower Parent or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 600,000,000 and 0.50 times 15.0% of Consolidated Total Assets when made, plus (Y) so long as no Default or Event of Default shall have occurred and be continuing, any portion of the EBITDA calculated Available Amount on the date of such election that the Lux Borrower elects to apply to this Section 6.04(j)(Y) in a Pro Forma Basis for written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the then most recently ended Test Periodamount of Available Amount immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Lux Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower Parent or a Subsidiary as a result of a foreclosure by the Borrower Parent or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower Parent or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(on) acquisitions by the Parent, any Borrower or any Subsidiary of obligations of one or more officers or other employees of the Parent, theany Borrower or its itsany of the Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerParent, so long as no cash is actually advanced by the theany Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Parent, any Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (a), (b), (e), (f), (g), (h), (i), (j), (k) or (l) of the definition thereof, in each case entered into by the Parent, any Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qp) Investments to the extent that payment for such Investments is made with Equity Interests (other than Disqualified Stock) of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or personsParent; provided, that (i) the fair market value issuance of such assets, determined Equity Interests are not included in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer any determination of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedAvailable Amount;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(vr) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower Parent or such Subsidiary;
(xt) Investments by the Borrower Parent and its the Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower Parent or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06(g) in such amount (provided, provided that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 6.06(g) for all purposes of this Agreement);
(yu) Investments consisting of Securitization Permitted Receivables Facility Assets or arising as a result of Permitted Securitization FinancingsQualified Receivables Facilities;
(zv) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits joint marketing or feesother similar arrangements with other persons, arising in each case in the ordinary course of business or consistent with past practicebusiness;
(aaw) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bbx) [reserved]Investments received substantially contemporaneously in exchange for Qualified Equity Interests of the Parent; provided, that the issuance of such Qualified Equity Interests are not included in any determination of the Available Amount;
(ccy) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent changes in valuewrite-downs or write-offs thereof) of Investments made after the Closing Date pursuant to this Section 6.04(cc6.04(y) shall not exceed the sum of (A) the greater of $40,000,000 150,000,000 and 0.40 times 4.0% of Consolidated Total Assets when made, plus (B) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodamount originally invested); provided, that if any Investment pursuant to this Section 6.04(cc6.04(y) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Lux Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(cc6.04(y);
(dd) [reserved];
(eez) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investmentsconsisting of Guarantees of Indebtedness of joint ventures, in an aggregate outstanding principal amount (valued at plus, without duplication, the time aggregate amount of the making thereof, and without giving effect unreimbursed payments made pursuant to any subsequent changes in valuesuch Guarantee) not to exceed the greater of $15,000,000150,000,000 and 4.0% of Consolidated Total Assets when made; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);and
(ffaa) any Investment additional Investments, so long as, at the time any such Investment is made and immediately after giving effect to such Investmentthereto, (x) no Default or Event of Default shall have occurred and is continuing and (y) the Total Net Total Leverage Ratio on a Pro Forma Basis would is not exceed 1.75 greater than 3.50 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved].; and
(hhbb) Investments made (i) in connection with from and after the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments Closing Date but prior to the Third Amendment Effective Date pursuant to agreements set forth on Schedule 3.08(bSection 6.04(b)(iv), Section 6.04(e)(i), Section 6.04(j), Section 6.04(k) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso extent made in Section 6.04(breliance on clause (vi) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrowerdefinition of Permitted Business Acquisition), be increased by Section 6.04(y) and Section 6.04(z), to the amount of extent such Investments that could be were made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofsuch provisions.
Appears in 1 contract
Samples: Credit Agreement (Mallinckrodt PLC)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger or amalgamation with a person that is not a Wholly Owned Subsidiary immediately prior to such mergermerger or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person (including, for the avoidance of doubt, any Unrestricted Subsidiary), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(cb) Permitted Investments and Investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition sale of assets permitted under Section 6.056.04;
(ed) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate amount at any time outstanding amount not to exceed (valued calculated without regard to write-downs or write-offs thereof) $5.0 million (calculated at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000incurrence), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower or such Subsidiary in cash as common equity;
(fe) accounts receivableAccounts, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(f) Swap Agreements (excluding any Swap Agreement entered into for speculative purposes, which, for the avoidance of doubt, shall not be permitted);
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Initial Closing Date and set forth on Schedule 6.04 6.03 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (hg) (calculated without regard to write-downs or write-offs) is not increased at any time above the amount of such Investment Investments existing or committed on the Initial Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Initial Closing Date or as otherwise permitted by this Section 6.04Date);
(ih) Investments resulting from pledges and deposits under Sections 6.02(f6.02(e), (gf), (oh), ,
(r), (s), (eei) and (ll)Investments constituting Permitted Business Acquisitions;
(ji) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount the Equity Interests of any Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided, that the sum of (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed made after the greater of $50,000,000 and 0.50 times Initial Closing Date by the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment Loan Parties pursuant to this Section 6.04(jclause (i) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties, plus (B) the net amount outstanding in respect of intercompany loans made after the Initial Closing Date by Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between to Subsidiaries that are not Loan Parties and pursuant to clause (ii), plus (C) the aggregate outstanding amount of Guarantees of Indebtedness after the Initial Closing Date by Loan Parties of Subsidiaries that are not Loan Parties permitted pursuant to clause (iii) (together with any Guarantees of Indebtedness set forth on Schedule 6.03) shall not exceed $5.0 million (plus any return of capital actually received by Section 6.01(mthe respective investors in respect of such Investments theretofore made by them pursuant to this paragraph (j));
(mk) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a any Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries such Subsidiary, as applicable, with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nl) Investments of a Subsidiary that is acquired after the Initial Closing Date or of a person an entity merged into or amalgamated or consolidated with the Borrower or merged into or consolidated with a Subsidiary after the Initial Closing Date, in each case, (i) to the extent the acquisition of such acquisitionSubsidiary or such merger, merger amalgamation or consolidation consolidation, as applicable, is permitted under this Section 6.046.03 and, (ii) in the case of any acquisitionmerger, merger amalgamation or consolidation, in accordance with permitted under Section 6.05 6.04 and (iiiii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(om) acquisitions by the Borrower any Loan Party of obligations of one or more officers or other employees of the Borrower Borrower, any Parent Entity, such Loan Party or its Subsidiaries subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerBorrower or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(pn) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qo) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerBorrower or any Parent Entity;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(sp) Investments consisting of Restricted Payments the redemption, purchase, repurchase or retirement of any Equity Interests permitted under Section 6.066.05;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code UCC Article 3 endorsements for collection or deposit and Uniform Commercial Code UCC Article 4 customary trade arrangements with customerscustomers consistent with past practices;
(u) [reserved];
(vr) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.046.03);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such any Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aat) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase advances in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties transfer pricing and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns cost-sharing arrangements (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.i.
Appears in 1 contract
Samples: Term Loan Credit Agreement (Meridian Bioscience Inc)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower Issuer and the Subsidiaries and (BSubsidiaries) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower Issuer or any Subsidiary Guarantor in the Equity Interests of the Borrower Issuer or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Guarantor; (ii) intercompany loans from the Borrower Issuer or any Subsidiary Guarantor to the Borrower Issuer or any SubsidiarySubsidiary Guarantor; and (iii) Guarantees by the Borrower Issuer or any Subsidiary Guarantor of Indebtedness otherwise permitted hereunder of the Borrower Issuer or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Guarantor;
(c) Permitted Investments and Investments that were Permitted Investments when madeInvestments;
(d) Investments arising out of the receipt by the Borrower Issuer or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.058.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower Issuer or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,0002,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice or industry practice and (iviii) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower Issuer in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or and consistent with past practice or industry practices and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementsin the ordinary course of business;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 8.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04)Date;
(i) Investments resulting from pledges and deposits under Sections 6.02(f8.02(f), (g), (o), (r), (s), (aa), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)[Reserved];
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m)[Reserved];
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or and consistent with past practice or industry practices or Investments acquired by the Borrower Issuer or a Subsidiary as a result of a foreclosure by the Borrower Issuer or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
; (n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower Issuer or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.048.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 8.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person Person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business in connection with the cash management operations of the Company and the Subsidiaries) to or consistent with past practice)Guarantees of the obligations of, or make or permit to exist any investment or any other interest in (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), in any other Person, except:
(a) [reserved];
Investments (including, but not limited to, Investments in Equity Interests, intercompany loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by (i) Investments by Loan Parties in the Foreign Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity Subsidiaries that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatare not Loan Parties in an aggregate amount, as at any date of determination, when combined with the aggregate outstanding principal amount of Revolving Facility Loans made to the Foreign Borrower, not to exceed an amount equal to U.S.$50.0 million (valued at the time of the making thereof, thereof and at the time any Revolving Facility Loans are made to the Foreign Borrower and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) (plus any return of (A) Investments made after the Closing Date capital actually received by the respective investors in respect of investments previously made by them pursuant to this clause a(i)), (ii) Loan Parties pursuant to subclause in Domestic Loan Parties and (iiii) in Subsidiaries that are not Subsidiary Loan Parties in Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;.
(cb) Permitted Investments and Investments investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the Borrower Company or any Subsidiary of non-cash consideration for the Disposition sale of assets permitted under Section 6.05;
(ed) (i) loans and advances to, or Guarantees of Indebtedness of, officers, directors, to employees or consultants of the Borrower Company or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, U.S.$4.0 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fe) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(f) Swap Agreements permitted pursuant to Section 6.13 and Capital Expenditures permitted pursuant to Section 6.10;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, on the Closing Date and set forth on Part I of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount Investments set forth on Part II of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section Schedule 6.04);
(ih) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(ji) other Investments by the Borrower Company or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed U.S.$75.0 million (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 investments theretofore made by it pursuant to this paragraph (i));
(j) Investments constituting Permitted Business Acquisitions in an aggregate amount, which shall be deemed to include the principal amount of Indebtedness that is assumed pursuant to Section 6.01 in connection with such Permitted Business Acquisitions, not to exceed U.S.$125.0 million during any fiscal year of the Company (provided that no such Dollar limitation shall apply so long as, at the time of making any such Investment and 0.50 times after giving effect thereto, (1) no Default or Event of Default has occurred and is continuing or would result therefrom and (2) the EBITDA Leverage Ratio shall be less than 2.75:1.00 calculated on a Pro Forma Basis for pro forma basis as of the then last day of the most recently ended Test Periodfiscal quarter in respect of which financial statements have been delivered pursuant to Section 5.04); provided that if the portion of aggregate consideration for any Permitted Business Acquisition that constitutes an earn out or similar obligation shall not be considered an Investment pursuant to for purposes of this paragraph (j) or Indebtedness for purposes of Section 6.04(j) 6.12 until the fiscal quarter in which the same is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)earned;
(k) additional Investments constituting Permitted Acquisitions so long as immediately after giving effect may be made from time to such Permitted Acquisition, time to the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event extent made with proceeds of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time Equity Interests of the making thereofCompany, and without giving effect which proceeds or Investments in turn are contributed (as common equity) to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Party;
(l) Investments (including, but not limited to, Investments in Equity Interests, intercompany loans between Subsidiaries that are not Loan Parties loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by Subsidiaries that are not Domestic Loan Parties permitted by Section 6.01(m)in any Loan Party or other Subsidiary.
(m) Investments arising as a result of Permitted Receivables Financings;
(mn) the Transactions;
(o) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(np) Investments of a Subsidiary acquired after the Closing Date or of a person corporation merged into the Borrower Company or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(pq) Guarantees by the Borrower Company or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrowerbusiness;
(r) Investments a joint venture (including a non-majority owned joint venture) with, or a significant Investment in, a Chinese entity or a project or venture with such Chinese entity (in either case, in an aggregate principal amount not to exceed U.S.$50.0 million) involving a Subsidiary of the Company doing business in China, which venture may result in the Company no longer owning a majority of the Equity Interests of such Subsidiary or the Company or any of its Subsidiaries acquiring an interest in one or more newly formed persons that are received new joint venture entities arising in consideration of the contribution by the Borrower connection with such project or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedventure;
(s) joint ventures (including non-majority owned joint ventures) with, or significant Investments consisting of Restricted Payments permitted under Section 6.06in, entities or projects or ventures with such entities (in either case, in an aggregate principal amount not to exceed U.S.$50.0 million);
(t) Investments to investigate or remedy environmental conditions in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;otherwise in an aggregate amount not exceeding U.S.$5.0 million and already accrued at March 31, 2010; and
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expensesLoans, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower capital contributions and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after subsequent to the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofPermitted Foreign Restructuring.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Owned Subsidiary immediately prior to such merger, consolidation or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (each, an “Investment”), any other than person, except:
(a) the Exchange Transactions;
(i) Investments by the Borrower or any Subsidiary in respect the Equity Interests of the Borrower or any Subsidiary; (ii) intercompany loans from the Borrower, Holdings or any Table of Contents Subsidiary to the Borrower, Holdings or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided, that the sum of (A) Investments (valued at the time of the making thereof and without giving effect to any write downs or write offs thereof) made after the Closing Date by the Loan Parties pursuant to clause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net intercompany loans made after the Closing Date to Subsidiaries that are not Subsidiary Loan Parties pursuant to clause (ii), plus (C) Guarantees of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to clause (iii), plus (D) any Investments made pursuant to subsection (j) of this Section shall not exceed an aggregate net amount equal to $8 million (plus any return of capital actually received by the respective investors in respect of Investments theretofore made by them pursuant to this paragraph (b)); provided, further, that (x) intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting management operations of the Borrower and the Subsidiaries and (By) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, practice shall not be included in one transaction or a series of related transactions, (x) all or substantially all of calculating the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary limitation in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as this paragraph at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000time;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,0005 million and 0.25% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such loan or advance for which financial statements have been delivered pursuant to Section 5.04 in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Swap Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted pursuant to Section 6.01;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Date);; Table of Contents
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (ok), (r), (s), (eeu) and (lldd);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite downs or write offs thereof) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment that, when combined with Investments made pursuant to subsection (b) of this Section 6.04(j) is made in and any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been Restricted Payments made pursuant to Section 6.04(b) 6.06(e), shall not exceed $8 million (to the extent permitted plus any returns of capital actually received by the proviso thereto respective investor in the case respect of any Subsidiary that is not a Loan Party) and not in reliance on investments theretofore made by it pursuant to this Section 6.04(jparagraph (j));
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Foreign Subsidiaries that are not Loan Parties and Guarantees by Foreign Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary any of the Subsidiaries as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person an entity merged into into, or consolidated or amalgamated with, the Borrower or merged into or consolidated or amalgamated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.046.04 and, (ii) in the case of any acquisition, merger merger, consolidation or consolidationamalgamation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, consolidation or consolidation amalgamation and were in existence on the date of such acquisition, merger merger, consolidation or consolidationamalgamation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower or its the Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerHoldings (or any Parent Entity);
(r) Investments in the Equity Interests [Reserved]; Table of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
Contents (s) Investments consisting of Restricted Payments the redemption, purchase, repurchase or retirement of any Equity Interests permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than loans or advances in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting management operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(b) after giving effect to the applicable Investments, (i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount of (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed the sum of (X) the greater of $15,000,00010,000,000 and 1% of Consolidated Total Assets plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,00010,000,000 and 1% of Consolidated Total Assets in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Date);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 25,000,000 and 0.50 times the EBITDA calculated 2.5% of Consolidated Total Assets plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on a Pro Forma Basis for the then most recently ended Test Periodsale, repayments, income and similar amounts) actually received in respect of any such Investments pursuant to this Section 6.04(j); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j) (except to the extent the preceding parenthetical does not apply);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower, Holdings, or any Parent Entity;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 15,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customerscustomers consistent with past practice and industry practice;
(u) [reservedReserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings[Reserved];
(z) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits or fees, arising joint marketing arrangements with other persons in the ordinary course of business or consistent with past practicebusiness;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved]Investments received substantially contemporaneously in exchange for Equity Interests of the Borrower, Holdings or any Parent Entity;
(cc) Investments in joint ventures; provided that ventures in an aggregate amount not to exceed the aggregate outstanding amount sum of (valued at the time of the making thereof, and without giving effect to any subsequent changes in valueX) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 25,000,000 and 0.40 times 2.5% of Consolidated Total Assets, plus (Y) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodrespective investor in respect of investments theretofore made by it pursuant to this clause (cc); provided, that if any Investment pursuant to this Section 6.04(ccclause (cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc) (except to the extent the preceding parenthetical does not apply);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, a Similar Business in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in valuewrite downs or write offs thereof) not to exceed the sum of (X) the greater of $15,000,00025,000,000 and 2.5% of Consolidated Total Assets plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment; provided, that the person in which Investments pursuant to this clause (dd) is made in shall become a Subsidiary Loan Party thereafter; provided, further, that such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary Loan Party and so long as such person remains a Subsidiary Loan Party, be deemed to have been made pursuant to Section 6.04(b) and not in reliance on this Section 6.04(dd); and
(ee) Investments in any Unrestricted Subsidiaries in an aggregate amount (valued at the time of the making thereof, and without giving effect to any write downs or write offs thereof) not to exceed the sum of (X) the greater of $25,000,000 and 2.5% of Consolidated Total Assets plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrowershall, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee) (except to the extent the preceding parenthetical does not apply);; and
(ff) any other Investments, provided, that at the time such Investment so long as, immediately after giving effect to such Investmentis made, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing DatePayment Conditions are satisfied. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b), 6.04(j) or Section 6.04(j6.04(dd) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related SectionSections; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under one of the other Related SectionSections. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be thereof (as determined in good faith by the Borrower and may be determined either, at the option of the Borrower, in good faith) valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (write-downs or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination write-offs thereof.
Appears in 1 contract
Samples: Asset Based Revolving Credit Agreement (DS Services of America, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) (excluding for purposes of the calculation in this proviso any Investment made at a time when, immediately after giving effect thereto, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 2.72 to 1.00, which Investment shall be permitted under this Section 6.04(b) without regard to such calculation), shall not exceed the sum of (X) the greater of $15,000,00040,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition of assets permitted under Section 6.05;
(e) (i) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of Holdings, the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice not to exceed $20,000,000 in an the aggregate at any time outstanding amount (valued at the time of the making thereof, and calculated without giving effect regard to any subsequent change in value) not to exceed $10,000,000), (ii) in respect advances of payroll payments and expenses in the ordinary course of payments, business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred expenses and expenses to employees in the ordinary course of business or consistent with past practice and (iviii) in connection with such person’s purchase of Equity Interests of Holdings, the Borrower or any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fi) accounts receivable, security deposits and prepayments arising arising, and trade credit granted granted, in the ordinary course of business or consistent with past practice and business, (ii) any assets or securities received in satisfaction or partial satisfaction thereof of defaulted accounts receivable from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and (iii) any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Swap Agreements;
(h) Investments existing onon the Closing Date, or contractually committed as of, of the Closing Date Date, and set forth on Schedule 6.04 to the Original Credit Agreement and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (rk), (s), (ee) and (llu);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (X) the greater of $50,000,000 100,000,000 and 0.50 0.29 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided , plus (Y) any portion of the Available Free Cash Flow Amount on the date of such election that if any Investment pursuant the Borrower elects to apply to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on 6.04(j)(Y), which such Investment was made but becomes election shall be set forth in a Subsidiary thereafterwritten notice of a Responsible Officer thereof, then such Investment may, at which notice shall set forth calculations in reasonable detail the option amount of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as Available Free Cash Flow Amount immediately after giving effect prior to such Permitted Acquisitionelection and the amount thereof elected to be so applied; provided, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have has occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed therefrom and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect thereto, and, plus (Z) an amount equal to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference pursuant to one category of permitted Investments clause (or X); provided that if any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.Investment pursuant to this
Appears in 1 contract
Samples: First Lien Credit Agreement (Exela Technologies, Inc.)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person any Person that is was not a Wholly Owned wholly-owned Subsidiary immediately prior to such merger) any Equity Interests, capital stock, evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of any other personthe foregoing) of, (ii) make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any Investment or Guarantees of the Indebtedness of any other person (interest in, any other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)Person, or (iii) purchase or otherwise acquire, acquire (in one transaction or a series of related transactions, (x) all or substantially all any assets of the property and assets or business of another person or (y) assets any other Person constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Permitted Investments;
(ib) Investments by the Borrower loans or any Subsidiary in the Equity Interests of the Borrower or advances made to any Subsidiary (or any special-purpose entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower created or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired sponsored by the Borrower or a Subsidiary) or made by any Subsidiary as a result of a foreclosure (or any special-purpose entity created or sponsored by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (iSubsidiary) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make (or any special-purpose entity created or sponsored by the Borrower or a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this AgreementSubsidiary);
(yc) Investments consisting of Securitization Assets or arising as a result of Guarantees constituting Permitted Securitization FinancingsIndebtedness;
(zd) loans Specified Transactions, other than:
(i) Specified Transactions with respect to which the Total Non-Stock Consideration paid or advances to members representing their deferred initiation deposits or fees, arising payable by the Loan Parties exceeds (i) $50,000,000 in the ordinary course aggregate in respect of business or consistent with past practice;
Specified Transactions that occur during the period from the date hereof until the end of fiscal year 2010 and (aaii) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case $200,000,000 in the ordinary course aggregate per fiscal year in respect of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided Specified Transactions that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to occur during any subsequent changes in value) of Investments made fiscal year after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodfiscal year 2010; provided, however, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes Loan Party may enter into a Subsidiary thereafter, then such Investment may, at the option Specified Transaction regardless of the Borrower, upon such person becoming a Subsidiary and value of Total Non-Stock Consideration so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Specified Transaction involves no unaffiliated third parties and involves only such Loan Party) Party and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]one or more Subsidiaries; and
(hhii) Investments made Specified Transactions with respect to which the Total Stock Consideration paid or payable by such Guarantor exceeds $750,000,000 in the aggregate per fiscal year; and
(ie) in connection accordance with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time and pursuant to the proviso in Section 6.04(b) or Section 6.04(j) terms of the indentures governing the Indenture Indebtedness (such Sections, the “Related Sections”) may, at the election as a conversion of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant debt to any clause set forth above. The amount of any Investment made other than in the form of cash equity securities or cash equivalents shall be the fair market value thereofsettlement thereof by way of repaying, which shall be determined in good faith by the Borrower and may be determined eitherprepaying, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofpurchasing Indebtedness thereunder).
Appears in 1 contract
Samples: Credit Agreement (Sunpower Corp)
Investments, Loans and Advances. Have outstanding or make any Investment in, any other Person or suffer to exist any Investment, or any obligation to make such Investment, except as set forth on Schedule 10.03 and except:
(a) Permitted Investments;
(b) loans, advances or other Investments made by (i) Purchase AbitibiBowater or acquire (including pursuant any Subsidiary of AbitibiBowater to or in any merger with Loan Party or any Wholly Owned Domestic Subsidiary or any Wholly Owned Canadian Subsidiary of AbitibiBowater, provided that any such Investments by a person Loan Party to or in any such Subsidiary that is not a Wholly Owned Subsidiary immediately prior Loan Party (x) complies with the requirements of Section 10.12 and (y) are in an aggregate amount not to such merger) exceed $10,000,000 outstanding at any Equity Interests, evidences of Indebtedness or other securities of any other person, time and (ii) make any loans or advances Overseas Subsidiary of AbitibiBowater to or Guarantees of the Indebtedness of in AbitibiBowater or any other person Subsidiary of AbitibiBowater;
(other than in respect of c) (Ai) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having other Investments made to or in any Subsidiary of AbitibiBowater (other than a term not exceeding 364 days (inclusive Loan Party, a Wholly-Owned Domestic Subsidiary or a Wholly-Owned Canadian Subsidiary of AbitibiBowater), and Guarantees of obligations of any roll-overs such Subsidiary, in an aggregate amount not to exceed $25,000,000 outstanding at any time and (ii) additional loans and advances made to or extensions in such Subsidiaries as part of terms) and made AbitibiBowater’s consolidated cash management operations in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary aggregate amount not to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as exceed $50,000,000 outstanding at any date of determinationtime, the aggregate outstanding amount (valued provided that each cash management account between any Loan Party and any Joint Venture Subsidiary shall be settled at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madeleast quarterly;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary that is not a Loan Party in any other Subsidiary that is not a Loan Party;
(e) Investments consisting of non-cash consideration for the Disposition received in connection with a sale of assets permitted under Section 6.0510.12;
(ef) loans Investments in existence on the Closing Date by AbitibiBowater, each other Borrower and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) their respective Subsidiaries in the ordinary course Equity Interests of business their respective Subsidiaries;
(g) Investments consisting of Equity Interests, securities or consistent with past practice notes received in an aggregate outstanding amount (valued at the time settlement of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, accounts receivable incurred in the ordinary course of business from a customer that AbitibiBowater or consistent any Subsidiary of AbitibiBowater has reasonably determined is unable to make cash payments in accordance with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount terms of such loans and advances shall be contributed to the Borrower in cash as common equityaccount receivable;
(fh) accounts receivablereceivable created or acquired, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any deposits, prepayments and other credits to suppliers made, in the ordinary course of business;
(i) any Investments consisting of (i) any contract pursuant to which AbitibiBowater or any Subsidiary of AbitibiBowater obtains the right to cut, harvest or otherwise acquire timber on property owned by any other Person, whether or not the Borrower’s or such Subsidiary’s obligations under such contract are evidenced by a note or other instrument, or (ii) loans or advances to customers of AbitibiBowater or any Subsidiary of AbitibiBowater, including leases of personal property of AbitibiBowater or such Subsidiary to such customers, provided that the contracts, loans and advances constituting permitted Investments pursuant to this paragraph (i) shall not exceed $20,000,000 at any time outstanding;
(j) prepaid expenses and lease, utility, workers’ compensation, performance and other similar deposits made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)business;
(k) Investments constituting Permitted Acquisitions loans to officers, directors and employees not to exceed $10,000,000 at any time outstanding;
(l) so long as immediately the Payment Conditions are satisfied both before and after giving effect to such Permitted AcquisitionInvestments, the Net Total Leverage Ratio on a Pro Forma Basis would AbitibiBowater and its Subsidiaries may make additional Investments not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties otherwise permitted by under this Section 6.01(m)10.03;
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts constituting Guarantees permitted under Section 10.01 and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultpermitted under Section 10.04(e);
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence described on the date of such acquisition, merger or consolidationSchedule 10.03;
(o) acquisitions by the Borrower Investments consisting of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligationsHedging Agreements permitted hereunder;
(p) Guarantees by Investments consisting of the Borrower acquisition or any Subsidiary redemption of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of Augusta Newsprint not owned on the Borrower;
(r) Investments in the Equity Interests Closing Date by AbitibiBowater or any of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount consideration payable by any Loan Party for such acquisition shall consist exclusively of (valued at the time i) Equity Interests of the making thereofAbitibiBowater, (ii) cash generated by Augusta Newsprint and without giving effect distributed to any subsequent changes in valuesuch Loan Party either (x) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (prior to the extent permitted by the proviso thereto payment of such consideration or (y) within two Business Days following such acquisition of redemption (in the case of any Subsidiary that is not a Loan Partythis clause (y) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by greater than the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted cash held by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, Augusta at the time of such Investment acquisition or as redemption) and/or (iii) promissory notes made by Augusta Newsprint that are non-recourse to any Loan Party or to any Subsidiary of any Loan Party (other than Augusta Newsprint) or to any of their respective assets (other than the assets or Equity Interests of Augusta Newsprint); and
(q) other Investments in an aggregate amount not to exceed $25,000,000 during the term of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofAgreement.
Appears in 1 contract
Investments, Loans and Advances. The Borrower will not, and will not permit any Restricted Subsidiary to make any Investment in any other Person, except (each of the following exceptions, “Permitted Investments”):
(a) Investments (i) Purchase existing or acquire contemplated on the Effective Date or (ii) made pursuant to binding agreements in effect on the Effective Date, in each case to the extent listed on Schedule 6.04 and (iii) in the case of each of clauses (i) and (ii), any modification, replacement, renewal, extension or reinvestment thereof, so long as the aggregate amount of all Investments pursuant to this Section 6.04(a) is not increased at any time above the amount of such Investments or binding agreements existing or contemplated on the Effective Date, except pursuant to the terms of such Investment or binding agreements existing or so contemplated as of the Effective Date (including pursuant to as a result of the accrual or accretion of original issue discount or the issuance of payment-in-kind obligations) or as otherwise permitted by this Section 6.04 or Section 6.07 (other than 6.07(d));
(i) Investments by or among the Borrower or any merger with a person Subsidiary Loan Party in the Borrower or any Subsidiary Loan Party, (ii) Investments by any Restricted Subsidiary that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness Loan Party in the Borrower or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries Restricted Subsidiary and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary Loan Party in the Equity Interests of the Borrower or any Restricted Subsidiary (or any entity that will become is not a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Party;
(c) Permitted Investments and in assets constituting, or at the time of making such Investments that were Permitted Investments when madewere, cash or Cash Equivalents;
(d) Investments arising out of the receipt by the Borrower or any Restricted Subsidiary of non-cash noncash consideration for the Disposition of assets from Dispositions permitted under Section 6.056.05 or Section 6.06;
(e) (A) loans and advances toto officers, or Guarantees of Indebtedness of, officersmanagers, directors, employees or employees, and consultants of the Borrower or any Subsidiary of its Restricted Subsidiaries (i) in to finance the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent or any of its Restricted Subsidiaries; provided that the amount of such loans and advances used to acquire such Equity Interests shall be contributed to the Borrower in cash as common equity, (ii) for reasonable and customary business related travel expenses, entertainment expenses, moving expenses and similar expenses or payroll expenses, in each case incurred in the ordinary course of business, and (iii) for additional purposes not contemplated by subclause (i) or (ii) above; provided that after giving effect to the making of any such loan or advance, the aggregate principal amount of all loans and advances outstanding under this Section 6.04(e)(iii) shall not exceed the greater of $15,000,000 and 4.0% of Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for the Test Period most recently ended on or prior to such date of Investment (measured as of the date such Investment is made based upon the Internal Financial Statements most recently available on or prior to such date) (calculated without regard to write-downs or write-offs thereof), and (B) advances of payroll payments and expenses to employees, consultants or independent contractors or other advances of salaries or compensation to employees, managers, consultants or independent contractors, in each case in the ordinary course of business;
(f) Investments consisting of advances, loans, rebates and extensions of credit in the nature of accounts receivable, notes receivable security deposits and prepayments (including prepayments of expenses) arising and trade credit granted in the ordinary course of business or consistent with past practice practice, and any assets or securities Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any other deposits, prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Investments in Swap Agreements entered into for non-speculative purposes permitted by Section 6.01(d) and Permitted Call Spread AgreementsCash Management Agreements permitted by Section 6.01;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under referred to in Sections 6.02(f6.02(g), (gh), (o), (rp), (s), (u), (v), (aa), (ee), (gg), (hh), (kk) and (llnn);
(ji) Investments by extensions of trade credit, asset purchases (including purchases of inventory, Intellectual Property, supplies, material or equipment or other similar assets), the Borrower lease or sublease of any Subsidiary in an aggregate outstanding amount (valued at asset and the time licensing or sublicensing or contribution of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment Intellectual Property pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection joint marketing arrangements with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliersother Persons, in each case in the ordinary course of business business;
(j) Investments received (i) in connection with, or consistent with past practice as a result of, any bankruptcy, workout, reorganization or Investments acquired by the Borrower recapitalization of suppliers, trade creditors or a Subsidiary customers or in settlement or compromise of delinquent obligations and disputes with, or judgments against, or other disputes with, customers, trade creditors or suppliers, including pursuant to any plan of reorganization or similar arrangement upon bankruptcy or insolvency of any customer, trade creditor or supplier, (ii) in satisfaction of judgments against other Persons, (iii) as a result of a the foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments Investment or other transfer of title with respect to any secured Investment in defaultor (iv) as a result of the settlement, compromise or resolution of litigation, arbitration or other disputes with Person who are not Affiliates;
(nk) Investments of a Restricted Subsidiary or held by a Person acquired after the Closing Effective Date or of a person merged into the Borrower or Person merged into or consolidated or amalgamated with the Borrower or a Restricted Subsidiary in accordance with Section 6.05 after the Closing Date, in each case, Effective Date to the extent that (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and (iii) such Investments were in existence on the date of such acquisition, merger or consolidation;
(ol) acquisitions by Investments received substantially contemporaneously in exchange for, or the Borrower payment of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of which is made with, Equity Interests of the Borrower; provided that (i) no Change in Control would result therefrom, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to and (ii) such officers or employees in connection with the acquisition of any such obligationsEquity Interests do not constitute Disqualified Equity Interests;
(pm) Guarantees by the Borrower or any Restricted Subsidiary of operating leases or subleases (other than Capitalized Financing Lease Obligations) ), Contractual Obligations or of other obligations of the Borrower or any Restricted Subsidiary, in each case that do not constitute Indebtedness, in each case Indebtedness and are entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(un) [reserved];
(vo) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04)Investments constituting Permitted Business Acquisitions;
(wp) advances any additional Investments (including Investments in Minority Investments, Investments in Unrestricted Subsidiaries and Investments in Joint Ventures or similar entities that do not constitute Restricted Subsidiaries), as valued at the form Fair Market Value of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under at the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in time each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint venturessuch Investment is made; provided that the aggregate outstanding amount of such Investment (valued at as so valued) shall not cause the time aggregate amount of the making thereof, and without giving effect to any subsequent changes in value) of all such Investments made after the Closing Date pursuant to this Section 6.04(cc6.04(p) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued measured at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any such Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafterto exceed, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving pro forma effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event sum of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with an amount not to exceed (A) the exercise greater of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b(x) or $125,000,000 and (iiy) in satisfaction 35% of obligations under joint venture agreements existing on the Closing Date. The amount Consolidated EBITDA of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at its Restricted Subsidiaries for the option Test Period most recently ended on or prior to such date of the Borrower, at the time of such Investment or Incurrence (measured as of the date of such Investment is made based upon the definitive agreement with respect Internal Financial Statements most recently available on or prior to such Investmentdate), and without giving effect to any subsequent change in value. The less (B) the aggregate amount of any Investment outstanding at any time shall be Restricted Payments made in reliance on Section 6.07(f)(iv), less (C) the original cost aggregate amount of such Investmentprepayments, reduced by any returns (including dividendsredemptions, interestrepurchases, distributions, returns of principal, profits on sale, repayments, income defeasances and similar amounts) actually received other payments in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described Junior Debt made in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.reliance on
Appears in 1 contract
Investments, Loans and Advances. The Borrower will not, and will not permit any Restricted Subsidiary to, make or permit to remain outstanding any Investments in or to any Person, except that the foregoing restriction shall not apply to:
(a) Investments as of the Initial Funding Date which are disclosed to the Lenders in Schedule (ii);
(b) accounts receivable arising in the ordinary course of business;
(c) Investments in Cash Equivalents;
(d) Investments (i) Purchase made by the Borrower in or acquire to the Guarantors (including pursuant to any merger new Restricted Subsidiary that becomes a Guarantor in compliance herewith substantially contemporaneously with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personInvestment being made), (ii) make made by any loans Guarantor in or advances to the Borrower or Guarantees any other Guarantor and (iii) made by any Restricted Subsidiary in or to the Borrower or the Guarantors;
(e) subject to the limits in Section 9.06 (and without duplication of Investments permitted under clause (g) below), Investments of the Indebtedness type described in clause (c) of the definition thereof in direct ownership interests in additional Oil and Gas Properties and gas gathering systems related thereto or related to farm-out, farm-in, joint operating, joint venture or area of mutual interest agreements, gathering systems, pipelines or other similar arrangements which are or have become usual and customary in the oil and gas exploration and production business located within the geographic boundaries of the United States of America;
(f) Investments in stock, obligations or securities received in settlement of debts arising from Investments permitted under this Section 9.04(b)(ii) and accounts receivable owing to the Borrower or any Restricted Subsidiary as a result of a bankruptcy or other person (other than insolvency proceeding of the obligor in respect of (A) intercompany liabilities incurred such debts or upon the enforcement of any Lien in connection with the cash management, tax and accounting operations favor of the Borrower or any of its Restricted Subsidiaries;
(g) subject to the limits in Section 9.06, Investments (including, without limitation, capital contributions) in general or limited partnerships or other types of entities (each a “Venture”) formed or incorporated, as the case may be, under applicable state law, by the Borrower or any Restricted Subsidiary, on the one hand, and any other Person, on the Subsidiaries other hand, in the ordinary course of business; provided that (i) any such Venture is engaged exclusively in oil and gas exploration, development, production, processing and related activities, including transportation, (Bii) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made the interest in such Venture is acquired in the ordinary course of business or consistent with past practice)and on fair and reasonable terms, or and (iii) purchase such Venture interests acquired and capital contributions made (valued as of the date such interest was acquired or otherwise acquirethe contribution made) do not exceed, in one transaction the aggregate at any time outstanding, an amount equal to $25,000,000;
(h) loans or a series of related transactionsadvances to employees, (x) all officers or substantially all directors of the property and assets Borrower or business any of another person or (y) assets constituting a business unitits Restricted Subsidiaries, line of business or division of such person (in each case only as permitted by applicable law, including Section 402 of the foregoingSarbanes Oxley Act of 2002, an “Investment”), except:
(a) [reserved]but in any event not to exceed $5,000,000 in the aggregate at any time outstanding;
(i) Investments (i) guarantees of Debt permitted by Section 9.02 and (ii) guarantees by the Borrower or any Restricted Subsidiary in for the Equity Interests performance or payment obligations of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Wholly-Owned Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that which obligations were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is do not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)constitute Debt;
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to Swap Agreements otherwise permitted under this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)Agreement;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to in Unrestricted Subsidiaries, provided that (i) the aggregate amount of all such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would Investments at any one time shall not exceed 4.00 to 1.00; provided that no Event $17,500,000 (or its equivalent in other currencies as of Default shall have occurred the date of Investment) and be continuing; provided, further, that, if (ii) the Unused Availability is at least 15% of the Loan Limit immediately before and immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties Investments consisting of non-cash consideration received in connection with dispositions or transfers permitted by pursuant to Section 6.01(m)9.09;
(m) other Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case not otherwise permitted pursuant to this Section 9.04(b)(ii) not to exceed $20,000,000 in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;aggregate; and
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default is continuing or would result therefrom, other Investments in an aggregate amount not to exceed 100% of the Borrower’s Distributable Free Cash Flow so long as, the Borrower shall have occurred provided the notice and be certificate required by Section 8.01(p) and after giving pro forma effect to such Investment, (i) no Default or Event of Default is continuing or would result therefrom, (yii) Unused Availability is not less than 20% of the Loan Limit and (iii) the fair market value (as determined Borrower is in good faith by compliance with the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expensesConsolidated Total Leverage Ratio, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis (including any incurrence of Debt in connection with such Investment), for the then Rolling Period most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on for which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to financial statements have been made delivered pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b8.01(a) or (ii) in satisfaction b), as applicable, of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant less than 2.50 to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof1.00.
Appears in 1 contract
Samples: Credit Agreement (Pressburg, LLC)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person (other than in respect interest in, or the acquisition of all or any substantial part of the assets of (A) intercompany liabilities incurred in connection with the cash managementeach, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practicean "Investment"), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)any other person, except:
(a) [reserved]Investments made pursuant to the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Amendment Effective Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Amendment Effective Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Amendment Effective Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (iii) ), shall not exceed an aggregate net amount equal to (x) $15,000,00025.0 million (plus any return of capital (to the extent received by the Borrower or a Subsidiary Loan Party in cash) in respect of investments made pursuant to this paragraph (b)); plus (y) the portion, if any, of the Available Investment Basket Amount on the date of such election that the Borrower elects to apply to this Section 6.04(b)(y);
(c) Permitted Investments and Investments, or any Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) (i) loans and advances to, or Guarantees of Indebtedness of, officers, directors, to employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, 2.5 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Swap Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted pursuant to Section 6.13;
(h) Investments existing on, or contractually committed as of, the Closing Amendment Effective Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) since the Amendment Effective Date not to exceed (i) the greater of $50,000,000 50.0 million and 0.50 times 4.25% of Consolidated Total Assets as of the EBITDA calculated end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04 (plus any returns of capital actually received by the respective investor in respect of investments theretofore made by it pursuant to this paragraph (j)) plus (ii) if as of the last day of the immediately preceding Test Period the Borrower shall have been in compliance with the Incurrence Test (on a Pro Forma Basis for Basis), the then most recently ended Test Period; provided portion, if any, of the Available Investment Basket Amount on the date of such election that if any Investment pursuant the Borrower elects to apply to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j6.04(j)(ii);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Foreign Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m6.01(l);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(n) Investments of a Subsidiary acquired after the Closing Amendment Effective Date or of a person corporation merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) after the Amendment Effective Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries any Subsidiary in connection with such officer’s 's or employee’s 's acquisition of Equity Interests of the Borrower, so long as no cash or other property is (or will be or is committed to be) actually advanced by the Borrower or such Subsidiary to any of the Subsidiaries to such officers or employees person in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or such Subsidiary in the ordinary course of business;
(q) Investments made using Equity Interests of the Borrower; and
(r) Investments made in any Foreign Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or manner reasonably consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Neither the Borrower nor any of its Subsidiaries will make or acquire (including pursuant permit to remain outstanding any Investments in or to any merger with a person Person, except that is the foregoing restriction shall not a Wholly Owned Subsidiary immediately prior to such mergerapply to:
(a) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of Investments reflected in the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations Borrower’s audited consolidated balance sheet of the Borrower and the its Consolidated Subsidiaries and as of December 31, 2018;
(Bb) intercompany loans, advances accounts or Indebtedness having a term not exceeding 364 days (inclusive notes receivable arising out of any roll-overs or extensions of terms) and made trade credit, prepayments or similar transactions in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000business;
(c) Permitted Investments cash and Investments that were Permitted Investments when madeCash Equivalents;
(d) Investments arising out of (i) made by the receipt Borrower in or to the Guarantors, (ii) made by any Subsidiary in or to the Borrower or any Guarantor, but subject to the conditions set forth in Section 9.02(c), if applicable, and (iii) made by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, Guarantor in or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted AcquisitionGuarantor, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) all Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure made by the Borrower or any of the Subsidiaries with respect Guarantor in or to any secured Investments or other transfer of title with respect to Subsidiary that is not a Guarantor shall not exceed $2,000,000 at any secured Investment in defaulttime;
(ne) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date(including, in each casewithout limitation, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (iicapital contributions) in the case of any acquisition, merger general or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers limited partnerships or other employees types of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrowerentities (each, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(pa “venture”) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary of its Subsidiaries with others in the ordinary course of business; provided that (i) the interest in such venture is acquired in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the on fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and reasonable terms and (ii) in respect of each such contribution, a Responsible Officer venture interests acquired and capital contributions made (valued as of the Borrower shall certifydate such interest was acquired or the contribution made) do not exceed, in a form the aggregate at any time outstanding an amount equal to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied$2,000,000;
(sf) subject to the limits in Section 9.06, Investments consisting in direct ownership interests in Midstream Properties or Persons owning Midstream Properties or related to joint operating, joint venture or area of Restricted Payments permitted under Section 6.06mutual interest agreements or other similar arrangements that are usual and customary in the midstream business, in each case, located within the geographic boundaries of the United States of America, in an aggregate amount not to exceed $2,000,000 from and after the Ninth Amendment Effective Date;
(tg) Investments loans or advances to employees, officers or directors in the ordinary course of business of the Borrower or consistent with past practice consisting any of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customersits Subsidiaries, in each case only as permitted by Governmental Requirements, including Section 402 of the Sarbanes Oxley Act of 2002, but in any event not to exceed $250,000 in the aggregate at any time;
(uh) [reserved]Investments in stock, obligations or securities received in settlement of debts arising from Investments permitted under this Section 9.05 owing to the Borrower or any of its Subsidiaries as a result of a bankruptcy or other insolvency proceeding of the obligor in respect of such debts or upon the enforcement of any Lien in favor of the Borrower or any of its Subsidiaries; provided that the Borrower shall give the Administrative Agent prompt written notice in the event that the aggregate amount of all Investments held at any one time under this Section 9.05(h) exceeds $250,000;
(vi) Guarantees permitted under Section 6.01 (except any Energy Transition Investments made by the Borrower or its Subsidiaries in cash or Cash Equivalents generated from the business operations of the Borrower or its Subsidiaries or using the proceeds of Revolving Borrowings hereunder, in an aggregate amount not to exceed $350,000 from and after the extent such Guarantee is expressly subject to this Section 6.04)Twelfth Amendment Effective Date;
(wj) advances any Energy Transition Investments made by the Borrower or its Subsidiaries using the cash or Cash Equivalent proceeds of a contribution of capital to the Borrower within 30 days of such contribution;
(k) any other Energy Transition Investments made by the Borrower or its Subsidiaries in an aggregate amount not to exceed the aggregate amount of proceeds received by the Borrower from the issuance or at-the-market sales by the Borrower of Equity Interests in the form Borrower on or after the Twelfth Amendment Effective Date less the aggregate amount of a prepayment of expensesEnergy Transition Investments made in reliance on this clause (k) on or after the Twelfth Amendment Effective Date; and
(l) any other Investments in an aggregate amount not to exceed the then-applicable Available Amount, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xi) Investments by the Borrower and its Subsidiaries, including loans Subsidiaries are in pro forma compliance with the ratio of Maximum Total Net Debt to any direct or indirect parent Adjusted EBITDA as of the Borrowerdate of, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (providedand after giving effect to, that the amount of any such Investment shall also be deemed to be (calculated on a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
pro forma basis (y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aaA) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving give effect to any subsequent changes in value) of Investments such Investment and each other Investment made after the Closing Date pursuant to this Section 6.04(cc9.05(l) shall not exceed during the greater current fiscal quarter, (B) using Total Net Debt as of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which of such Investment was made but becomes and (C) to account for any acquisitions having a Subsidiary thereafterfair market value of, then such Investment mayor dispositions that contributed to, individually or in the aggregate, at least five percent (5%) to the option of Midstream Adjusted EBITDA, as reflected in the Borrower, upon such person becoming a Subsidiary most recent financial statements and so long as such person remains a Subsidiary, be deemed to have been made certificates delivered pursuant to Section 6.04(b8.01(a) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this or Section 6.04(cc8.01(b);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at each case that has occurred after the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on most recent fiscal quarter for which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to financial statements have been made delivered pursuant to Section 6.04(b8.01(a) or Section 8.01(b)), (to ii) no Event of Default shall exist or result therefrom, and (iii) there remains at least 10% of unused availability of the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on Maximum Revolving Credit Amount under this Section 6.04(ee);
(ff) any Investment so long as, immediately Agreement after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Evolve Transition Infrastructure LP)
Investments, Loans and Advances. Neither Borrower nor any Restricted Subsidiary will, directly or indirectly, make any Investment, except for the following:
(a) (i) Purchase Investments in connection with the Xxxx Group Reorganization and (ii) Investments committed or acquire outstanding on the Closing Date (and to the extent in excess of $2.5 million individually, identified on Schedule 10.04), any extensions, renewals, or reinvestments thereof, and any Investments received in respect thereof without the payment of additional consideration (other than through the issuance of or exchange of Qualified Capital Stock);
(b) Investments in cash and Cash Equivalents (including pursuant Investments that were Cash Equivalents when made);
(c) Borrower may enter into Swap Contracts to the extent permitted by Section 10.01(c);
(d) Investments (i) by Borrower in any merger with a person that is not a Wholly Owned Restricted Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personJoint Venture, (ii) make by any loans Restricted Subsidiary or Joint Venture in Borrower, and (iii) by a Restricted Subsidiary or Joint Venture in another Restricted Subsidiary or Joint Venture; provided that, in each case, any intercompany loan (it being understood and agreed that intercompany receivables, liabilities, or advances to or Guarantees made in the ordinary course of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the business, including for cash management, tax tax, and accounting operations operations, do not constitute loans) in excess of $20.0 million individually shall be evidenced by a promissory note and, to the extent that the payee, holder or lender of such intercompany loan is a Credit Party, such promissory note shall be pledged (and delivered) by such Credit Party to Collateral Agent on behalf of the Secured Parties;
(e) Borrower and its Restricted Subsidiaries may sell or transfer assets to the Subsidiaries and extent permitted by Section 10.05;
(Bf) intercompany loans, advances Investments in securities of trade creditors or Indebtedness having a term not exceeding 364 days (inclusive customers or suppliers received pursuant to any plan of any roll-overs reorganization or extensions similar arrangement upon the bankruptcy or insolvency of terms) and made such trade creditors or customers or suppliers or in settlement of delinquent or overdue accounts in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the its Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(ng) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the made by Borrower or merged into any Restricted Subsidiary with, or consolidated with as a Subsidiary after the Closing Dateresult of, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or consideration received in connection with such acquisition, merger an Asset Sale or consolidation and were other disposition made in existence on the date of such acquisition, merger or consolidationcompliance with Section 10.05;
(oh) acquisitions by the Borrower of obligations of one or more officers or other Investments made to officers, directors and employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicenot to exceed $20.0 million in the aggregate at any time outstanding;
(qi) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerPermitted Acquisitions;
(rj) accounts receivable, security deposits, prepayments (including prepayments of expenses), credits and extensions of trade credit (including to gaming customers) in the ordinary course of business;
(k) Investments resulting from pledges and deposits permitted under Section 10.02; (l) in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution addition to Investments otherwise permitted by the this Section 10.04, Investments by Borrower or the applicable Subsidiary any of assets (including Equity Interests and cash) to such person or personsits Restricted Subsidiaries; provided, provided that (i) the fair market value amount of such assets, determined in good faith by the Borrower, so contributed Investments to be made pursuant to this clause (rSection 10.04(l) shall do not in exceed the aggregate exceed $10,000,000 Available Amount determined at the time such Investment is made and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower immediately before and the Administrative Agent (x) immediately after giving effect to such contributionthereto, no Default or Event of Default shall have has occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint venturescontinuing; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(ccclause (l) is made in any person that was is not a Restricted Subsidiary on of Borrower at the date on which of the making of such Investment was made but and such person becomes a Restricted Subsidiary thereafterof Borrower after such date, then such Investment mayshall, at upon the option election of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, thereafter be deemed to have been made pursuant to Section 6.04(bclause (d) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) above and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed shall cease to have been made pursuant to Section 6.04(bthis clause (l) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment for so long as, immediately after giving effect as such person continues to such Investment, the Net Total Leverage Ratio on be a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event Restricted Subsidiary of Default shall have occurred and be continuingBorrower;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Wynn Resorts LTD)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made incurred in the ordinary course of business or consistent with past practicebusiness), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the ADT Transactions;
(b) (i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) (excluding for purposes of the calculation in this proviso any Investment made at a time when, immediately after giving effect thereto, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 3.15 to 1.00, which Investment shall be permitted under this Section 6.04(b) without regard to such calculation), shall not exceed the sum of (X) the greater of (1) $15,000,000150,000,000 and (2) 0.05 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $10,000,00027,500,000 and 1.20% of Consolidated Total Assets as of the end of the then most recently ended Test Period, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 350,000,000 and 0.50 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) so long as no Default or Event of Default has occurred and is continuing, any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) which such election shall (unless such Investment is made pursuant to clause (a) of the definition of “Cumulative Credit”) be set forth in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Incremental Assumption and Amendment Agreement (ADT Inc.)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Wholly-Owned Subsidiary immediately prior to such merger, consolidation or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person, except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, as that the aggregate amount at any date of determination, the aggregate time outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Borrower or any Subsidiary Loan Parties Party pursuant to subclause clause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Borrower or any Subsidiary Loan Parties Party to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (ii), plus ) and (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date by the Borrower or any Subsidiary Loan Party of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (iii) shall not exceed at any time outstanding (1) the greater of (X) $15,000,00080 million and (Y) at the time of any incurrence under this clause (1), 8.0% of the Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, plus (2) the portion, if any, of the Cumulative Credit on the date of such election that the Borrower elects to apply to this paragraph (b); provided further, that notwithstanding the foregoing, Investments made after the Closing Date by the Borrower or any Subsidiary Loan Party in Evertec Latino are not subject to the limitations set forth in the preceding provision (and shall not be a use of any basket described herein) as long as such Investments are made in the ordinary course of business and consistent with past practice;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.056.05 (other than Section 6.05(g));
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of Holdings, the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,00015 million in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of Holdings, the Borrower or any Parent solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Swap Agreements that are not entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and consisting of intercompany loans or as set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause paragraph (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Date);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (ok), (r), and (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed (i) the greater of (X) $50,000,000 150 million and 0.50 times (Y) at the time of any Investment pursuant to this paragraph (j), 100% of the EBITDA calculated on a Pro Forma Basis for the then Test Period most recently ended Test Period(plus any returns actually received by the respective investor in respect of investments theretofore made by it pursuant to this paragraph (j)) plus (ii) the portion, if any, of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(ii), such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied; provided that if any Investment pursuant to this Section 6.04(jparagraph (j) is made in any person that was is not a Subsidiary on of the Borrower at the date on which of the making of such Investment was made but and such person becomes a Subsidiary thereafterLoan Party after such date, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, shall thereafter be deemed to have been made pursuant to Section 6.04(bparagraph (b) above and shall cease to have been made pursuant to this paragraph (j) for so long as such person continues to the extent permitted by the proviso thereto in the case of any be a Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person an entity merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation was or is permitted under this Section 6.04, (ii) in the case of any acquisition, merger 6.04 or consolidation, in accordance with Section 6.05 and (iiiii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, consolidation or consolidation amalgamation and were in existence on the date of such acquisition, merger merger, consolidation or consolidationamalgamation;
(on) acquisitions by the Borrower of obligations of one or more officers or other employees of any Parent, Holdings, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qp) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the BorrowerHoldings or any Parent;
(q) [Reserved];
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under by Section 6.06;
(ts) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customerscustomers consistent with past practices;
(t) [Reserved];
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(wv) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xw) Investments by the Borrower and its Subsidiaries, including loans and advances to any direct or indirect parent of the BorrowerHoldings, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, provided that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause paragraph of Section 6.06 for all purposes of this Agreement);
(yx) Investments consisting of Securitization Assets the licensing or arising as a result contribution of Permitted Securitization Financingsintellectual property pursuant to joint marketing arrangements with other persons;
(zy) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property intellectual property in each case in the ordinary course of business business, to the extent such purchases and acquisitions constitute Investments;
(z) Investments received substantially contemporaneously in exchange for Qualified Equity Interests of Holdings, the Borrower or consistent with past practiceany Parent Entity; provided that such Investments are not included in any determination of the Cumulative Credit;
(aa) Investments in joint ventures not in excess of $100 million in the aggregate at any time outstanding (plus any returns actually received by the respective investor in respect of investments theretofore made by it pursuant to this paragraph (aa)); provided that if any Investment pursuant to this paragraph (aa) is made in any person that is not a Subsidiary of Holdings at the date of the making of such Investment and such person becomes a Subsidiary Loan Party after such date, such Investment shall thereafter be deemed to have been made pursuant to paragraph (b) above and shall cease to have been made pursuant to this paragraph (aa) for so long as such person continues to be a Subsidiary Loan Party;
(bb) [reserved]any Investment (i) deemed to exist as a result of a Subsidiary that is not a Loan Party distributing a note or other intercompany debt to a parent of such Subsidiary that is a Loan Party (to the extent there is no cash consideration or services rendered for such note), and (ii) consisting of intercompany current liabilities in connection with the cash management, tax and accounting operations of Holdings, the Borrower and the Subsidiaries;
(cc) Investments in joint ventures; provided that the a Similar Business in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in valuewrite downs or write offs thereof) of Investments made after the Closing Date pursuant not to this Section 6.04(cc) shall not exceed the greater of (X) $40,000,000 100 million and 0.40 times (Y) at the EBITDA calculated on a Pro Forma Basis time of any Investment pursuant to this paragraph (cc), 10.0% of the Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04 (plus any returns actually received by the then most recently ended Test Periodrespective investor in respect of investments theretofore made by it pursuant to this paragraph (cc)); provided, provided that if any Investment pursuant to this Section 6.04(ccparagraph (cc) is made in any person that was is not a Subsidiary on of Holdings at the date on which of the making of such Investment was made but and such person becomes a Subsidiary thereafterLoan Party after such date, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, shall thereafter be deemed to have been made pursuant to Section 6.04(bparagraph (b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) above and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed shall cease to have been made pursuant to Section 6.04(bthis paragraph (cc) (for so long as such person continues to the extent permitted by the proviso thereto in the case of any be a Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhdd) Investments made (i) arising in connection with the exercise ordinary course of business as a result of any subscriptionsSettlement, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) including Investments in satisfaction and of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related SectionSettlement Assets. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (EVERTEC, Inc.)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestscapital stock, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to exist any investment or Guarantees of the Indebtedness of any other person (interest in, any other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)person, except:
(a) [reserved]investments by the Parent and the Borrower existing on the date hereof and set forth on Schedule 6.04 or resulting from the Merger;
(ib) Investments investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany in, and loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees advances by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of to, the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) investments in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired joint ventures formed by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees persons, including joint ventures formed to develop, own and operate towers, antennae and similar structures to be used in the businesses of the Borrower or its Subsidiaries in connection with a Subsidiary and such officer’s or employee’s acquisition other persons; provided that the aggregate amount of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or all such investments existing at any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligationstime shall not exceed $20,000,000;
(pd) Guarantees by the Borrower or loans and advances to employees in an aggregate amount outstanding at any Subsidiary time not to exceed $1,000,000;
(e) investments received in settlement of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by owed to the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qf) Investments to the extent that payment for such Investments is made with Equity Interests deferred purchase price receivables arising out of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments transactions entered into in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of by the Borrower or such any Subsidiary;
(xg) Investments investments in and loans to (i) persons with which the Borrower or one or more Subsidiaries have entered into, or have entered into an agreement giving them the right to enter into, Local Marketing Agreements and (ii) persons organized pursuant to any such Local Marketing Agreement; provided, that the aggregate amount of investments, loans and advances permitted to be made or to exist at any time under this clause (g), together with the aggregate amount of Indebtedness referred to in Section 6.01(j), shall not exceed $10,000,000;
(h) investments by the Borrower and its subsidiaries in Equity Interests of persons that, upon the making of such investments, become Wholly Owned Subsidiaries; provided that (i) if the Consolidated Leverage Ratio at the most recent fiscal quarter end shall have been greater than or equal to 3.50 to 1.00, including loans the Borrower and its subsidiaries will not make any such investment that would result in the aggregate amount of such investments exceeding $50,000,000, (ii) the ownership by the Borrower of such persons is consistent with the requirements of Section 6.08, (iii) no Default results from the making of any such investment and (iv) prior to the making of any direct or indirect parent such investment the Borrower shall have delivered to the Administrative Agent calculations demonstrating pro forma compliance with the covenants contained in Sections 6.14, 6.15 and 6.16 as of the Borrowerend of and for the most recent period of four fiscal quarters for which financial statements shall have been delivered pursuant to Section 5.03(a) or (b), giving effect to such investment and the incurrence of any related Indebtedness as if they had occurred at the beginning of such period;
(i) in the case of the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Permitted Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhj) Investments investments, loans or advances inadvertently made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant agreed to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a any Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form aggregate for all such investments, loans and advances are insignificant; provided that any such investment, loan or advance is eliminated with reasonable promptness after any Responsible Officer of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option becomes aware of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofsame.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to exist any investment or Guarantees of the Indebtedness of any other interest in, any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, referred to herein as an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the U.S. Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from and its Subsidiaries in existence on the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Effective Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(ib) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)Permitted Investments;
(jc) Investments by accounts receivable owing to the Borrower Borrowers or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed Subsidiaries arising from sales of inventory or the greater provision of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case services in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(nd) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Dateadvances to directors, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 officers and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower Borrowers or any of the Subsidiaries to meet expenses incurred by such directors, officers or and employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness, in an aggregate amount not to exceed U.S.$5,000,000 at any time outstanding;
(qe) Investments to the extent that payment for such Investments is made with Equity Interests securities of the Borrower;
(r) Investments in the Equity Interests any customer of one a Borrower or more newly formed persons that are any Subsidiary received in consideration lieu of the contribution by the cash payment, if such Borrower reasonably deems such customer to be in a reorganization or the applicable Subsidiary of assets (including Equity Interests and cash) unable to such person or persons; provided, that (i) the fair market value make a timely cash payment on Indebtedness of such assetscustomer owing to it, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each provided that such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary, as the case may be, has paid no new consideration (other than forgiveness of Indebtedness) therefor;
(xf) Investments by the Borrower and its Subsidiaries, including loans of a Loan Party in or to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement)another Loan Party;
(yg) Investments consisting the U.S. Borrower may make intercompany loans and advances to 3045843 Nova Scotia Company provided that the proceeds of Securitization Assets such loans and advances are subsequently loaned or arising as advanced, directly or indirectly, to a result of Permitted Securitization FinancingsCanadian Borrower or a Canadian Subsidiary Guarantor;
(zh) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (Borrowers may enter into Hedging Agreements to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc)6.12;
(ddi) [reserved];
the U.S. Borrower and its Subsidiaries may acquire all or substantially all the assets of a person or line of business of such person, or Equity Interests of a person that would become a wholly owned Subsidiary (eein each case referred to herein as the “Acquired Entity”); provided that (any acquisition of an Acquired Entity meeting all the criteria of this Section 6.04(i) Investments in any Unrestricted Subsidiaries after giving effect being referred to the applicable Investments, in an aggregate outstanding amount (valued herein as a “Permitted Acquisition”) at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);transaction:
(ffi) any Investment so long as, immediately both before and after giving effect to such Investmentthereto, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default or Default shall have occurred and be continuing;
(ggii) [reserved]the U.S. Borrower would be in compliance with the covenants set forth in Sections 6.10 and 6.11 as of the most recently completed period of four consecutive fiscal quarters ending prior to such transaction for which the financial statements required by Section 5.04(a) or 5.04(b) have been delivered or for which comparable financial statements have been filed with the SEC, after giving pro forma effect to such transaction and to any other event occurring during or after such period as to which pro forma recalculation is appropriate (including any Asset Sale and any other transaction described in this Section 6.04(i) occurring during or after such period) as if such transaction had occurred as of the first day of such period;
(iii) after giving effect to such acquisition, there must be at least U.S.$25,000,000 of the Revolving Commitments unused and available; provided, however that all pro forma calculations required to be made pursuant to this Section 6.04(i) shall (A) include only those adjustments that would be permitted or required by Regulation S-X under the Securities Act of 1933, as amended and (B) be certified to by a Financial Officer as having been prepared in good faith based upon reasonable assumptions;
(j) Investments consisting of non-cash proceeds of Asset Sales;
(k) Investments, without duplication, of the U.S. Borrower, the Canadian Borrowers and other Subsidiaries in Subsidiaries including the MAC Group relating to the MAC Merger made on or before the Implementation Date;
(l) Investments by a Subsidiary that is not a Loan Party in or to a Loan Party; and
(hhm) Investments made other Investments, without duplication, in an aggregate amount (ivalued at cost or outstanding principal amount, as the case may be) in connection with not greater than 15% of the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing U.S. Borrower’s Consolidated Net Worth calculated on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time date of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofmost recent fiscal quarter for which financial statements are available.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to exist any investment or Guarantees of the Indebtedness of any other interest in, any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, referred to herein as an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from and its Subsidiaries in existence on the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Effective Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(ib) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)Permitted Investments;
(jc) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect accounts receivable owing to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments arising from sales of inventory or other transfer the provision of title with respect to any secured Investment services in defaultthe ordinary course of business;
(nd) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Dateadvances to directors, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 officers and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to meet expenses incurred by such directors, officers or and employees in connection with the acquisition ordinary course of business, in an aggregate amount not to exceed AUD$5,000,000 at any such obligationstime outstanding;
(pe) Guarantees by securities of any customer of the Borrower or any Subsidiary received in lieu of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtednesscash payment, in each case entered into by if the Borrower reasonably deems such customer to be in a reorganization or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments unable to the extent that make a timely cash payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value on Indebtedness of such assetscustomer owing to it, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) provided that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary, as the case may be, has paid no new consideration (other than forgiveness of Indebtedness) therefor;
(xf) Investments by of a Loan Party (other than the Borrower and its Subsidiaries, including loans Parent) in or to any direct or indirect parent of another Loan Party (other than the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this AgreementParent);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bbg) [reservedReserved];
(cch) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (Borrower may enter into Hedging Agreements to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc)6.12;
(ddi) [reserved];
the Borrower and its Subsidiaries may acquire all or substantially all the assets of a person or line of business of such person, or Equity Interests of a person that would become a wholly owned Subsidiary (eein each case referred to herein as the “Acquired Entity”); provided that (any acquisition of an Acquired Entity meeting all the criteria of this Section 6.04(i) Investments in any Unrestricted Subsidiaries after giving effect being referred to the applicable Investments, in an aggregate outstanding amount (valued herein as a “Permitted Acquisition”) at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);transaction:
(ffi) any Investment so long as, immediately both before and after giving effect to such Investmentthereto, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default or Default shall have occurred and be continuing;
(ggii) [reserved]with respect to a transaction that is greater than AUD$10,000,000, the Borrower would be in compliance with the covenants set forth in Sections 6.10 and 6.11 as of the most recently completed period of four consecutive fiscal quarters ending prior to such transaction for which the financial statements required by Section 5.04(a) have been delivered, after giving pro forma effect to such transaction and to any other event occurring during or after such period as to which pro forma recalculation is appropriate (including any Asset Sale and any other transaction described in this Section 6.04(i) occurring during or after such period) as if such transaction had occurred as of the first day of such period;
(iii) after giving effect to such acquisition, there must be at least AUD$10,000,000 of Revolving Commitments unused and available; and
(hhiv) such acquisition as the case may be, shall not include leasehold or freehold real property , unless (A) the acquisition is a result of an acquisition of Equity Interests of a person and all of the leasehold or freehold real property that person owns is transferred to an Australian Affiliate Land Company on or before the time that the Acquired Entity executes a supplement making it a party to the Subsidiary Guarantee Agreement pursuant to Section 5.09(b) and, to the extent required under Section 5.14, a Land Access Agreement in respect of such real property has been executed by the relevant Loan Party, the Affiliate Australian Land Company and, where the land the subject of such agreement is not owned by an Affiliate Australian Land Company, the registered proprietor of that land and that executed agreement has been delivered to the US Agent on or prior to the date of transfer, or (B) such leasehold or freehold real property becomes Collateral upon the acquisition thereof subject to Security Documents acceptable to the US Agent; provided, however that all pro forma calculations required to be made pursuant to this Section 6.04(i) shall (A) include only those adjustments that would be permitted or required by Regulation S-X under the Securities Act of 1933, as amended and (B) be certified to by a Financial Officer as having been prepared in good faith based upon reasonable assumptions;
(j) Investments made consisting of non-cash proceeds of Asset Sales;
(ik) Investments of the Borrower and other Subsidiaries in connection with any Wholly Owned Subsidiary;
(l) Investments by a Subsidiary that is not a Loan Party in or to a Loan Party; and
(m) other Investments, without duplication, in an aggregate amount (valued at cost or outstanding principal amount, as the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(bcase may be) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election not greater than 15% of the Borrower, be increased by ’s Consolidated Net Worth calculated on the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time date of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (most recent fiscal quarter for which financial statements or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofmanagement accounts are available.
Appears in 1 contract
Samples: Syndicated Facility Agreement (Oil States International, Inc)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the 2015 Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) (excluding for purposes of the calculation in this proviso any Investment made at a time when, immediately after giving effect thereto, the Net First Lien Leverage Ratio on a Pro Forma Basis would not exceed 4.75 to 1.00, which Investment shall be permitted under this Section 6.04(b) without regard to such calculation) shall not exceed the sum of (X) the greater of (1) $15,000,000150,000,000 and (2) 0.80 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $10,000,00020,000,000 and 3.50% of Consolidated Total Assets as of the end of the then most recently ended Test Period, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 75,000,000 and 0.50 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of the Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business in connection with the cash management operations of Holdings and the Subsidiaries) to or consistent with past practice)Guarantees of the obligations of, or make or permit to exist any investment or any other interest in (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), in any other person, except:
(a) [reserved]Investments by Holdings in the Equity Interests of the U.S. Borrower;
(b) (i) Investments by the any Borrower or any Subsidiary in the Equity Interests of the any Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the any Borrower or any Subsidiary to any Borrower or any Subsidiary; (iii) Guarantees by the U.S. Borrower or any Domestic Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the U.S. Borrower or any Subsidiary; and (iiiiv) Guarantees by the Borrower or any Subsidiary non-Loan Parties of Indebtedness otherwise permitted hereunder or other obligations of the Borrower or any Subsidiarynon-Loan Parties; provided that, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries that are not Domestic Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside from the ordinary course of business Loans Parties after the Closing Date by the Loan Parties to Subsidiaries that are not Domestic Subsidiary Loan Parties pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Indebtedness of Subsidiaries that are not Domestic Subsidiary Loan Parties pursuant to subclause clause (iii), together with the aggregate amount of Investments constituting Permitted Business Acquisitions of Subsidiaries that are not Domestic Subsidiary Loan Parties following the consummation of such Permitted Business Acquisitions pursuant to paragraph (m) of this Section 6.04, shall not exceed an aggregate amount equal to (x) $15,000,000350.0 million (plus any return of capital actually received by the respective investors in respect of investments theretofore made by them pursuant to this paragraph b(i)), plus (y) the portion, if any, of the Applicable Amount on the date of such election that Holdings elects to apply to this Section 6.04(b);
(c) Permitted Investments and Investments investments that were Permitted Investments when made;
(d) [Reserved];
(e) intercompany loans from NDC to the U.S. Borrower; provided that such loans are subordinated to the Obligations in a manner reasonably acceptable to the Administrative Agent;
(f) Investments arising out of the receipt by the Borrower Holdings or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(eg) (i) loans and advances to, or Guarantees to employees of Indebtedness of, officers, directors, employees or consultants of the Borrower Holdings or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, 10.0 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fh) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(gi) Hedging Swap Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted pursuant to Section 6.14;
(hj) Investments existing on, or contractually committed as of, on the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(ik) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(jl) other Investments by the Borrower Holdings or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed (i) $150.0 million (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment investments theretofore made by it pursuant to this Section 6.04(jparagraph (l)), plus (ii) is made in any person that was not a Subsidiary the portion, if any, of the Applicable Amount on the date on which such Investment was election is made but becomes a Subsidiary thereafter, then such Investment may, at that the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed U.S. Borrower elects to have been made pursuant apply to Section 6.04(b) this paragraph (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(jl);
(km) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00Business Acquisitions; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect Investments constituting Permitted Business Acquisitions by the Loan Parties pursuant to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount this paragraph (valued at the time of the making thereof, and without giving effect to any subsequent change in valuem) of Permitted Acquisitions of Subsidiaries that are not Domestic Subsidiary Loan Parties or following the consummation of assets such Permitted Business Acquisition, which shall be deemed to include the principal amount of Indebtedness that are not owned is assumed pursuant to Section 6.01 in connection with such Permitted Business Acquisitions by Subsidiary Loan Parties shall such Subsidiaries, shall, together with the aggregate amount of Investments theretofore made pursuant to the proviso to Section 6.04(b), not exceed (i) $65,000,000350.0 million plus (ii) the portion, if any, of the Applicable Amount on the date such election is made that the U.S. Borrower elects to apply to this paragraph (m);
(ln) [Reserved];
(o) intercompany loans between Foreign Subsidiaries that are not Loan Parties or from a Foreign Subsidiary to any Domestic Subsidiary of NDC that is not a Loan Party and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m6.01(m)(i), (ii), (iv) and (v);
(mp) Investments arising as a result of Permitted Receivables Financings;
(q) [Reserved];
(r) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(ns) Investments of a Subsidiary acquired after the Closing Date or of a person corporation merged into the U.S. Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence inexistence on the date of such acquisition, merger or consolidation;
(ot) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations[Reserved];
(pu) Guarantees by the Borrower Borrowers or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) ), pension fund liabilities of any Subsidiary or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qv) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution performance Guarantees by the Borrower Borrowers or the applicable any Domestic Subsidiary Loan Party of assets (including Equity Interests and cash) to obligations of Subsidiaries and/or joint ventures so long as such person or persons; provided, that Guarantees (i) the fair market value do not constitute Guarantees of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 Indebtedness and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments are made in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);business; and
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;of:
(zi) loans the U.S. Borrower contributing (directly or advances to members representing their deferred initiation deposits or feesindirectly) all of the Equity Interests owned by the U.S. Borrower on October 19, arising 2005, in the ordinary course of business or consistent with past practice;
following subsidiaries to Nalco Universal Holdings B.V. (aa“NUH”), a Dutch holding company: (A) to the extent constituting InvestmentsNalco Gulf Limited; (B) Nalco Taiwan Co., purchases Ltd.; (C) Nalco Hellas, S.A. (Greece); (D) Nalco Hong Kong Limited; (E) Nalco Industrial Services (Thailand) Co., Ltd.; (F) Nalco Anadolu Kimya Sanayii Ve Ticaret A.S. (Turkey); (G) Ondeo Nalco India Limited; (H) Nalco Industrial Services (Su Zhou) Co., Ltd.; (I) Nalco ZAO (Russia); and acquisitions of inventory(J) Ondeo Nalco Saudi Co., supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]Ltd.; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) U.S. Borrower and Nalco Worldwide Holdings L.L.C. (such Sections, the “Related SectionsNWWH”) may, at the election contributing (directly or indirectly) all of the BorrowerEquity Interests owned by them on December 15, be increased by 2006, in the amount of Investments that could be made at such time under following subsidiaries to NUH: (A) Deryshares B.V.; (B) Nalco Polska Sp. z o.o.; (C) Nalco Egypt, Ltd.; (D) Nalco Hungary K.F.T.; (E) Nalco Holding S.L.; (F) Nalco Czechia SRO; (G) Nalco Philippines, Inc.; (H) Nalco Industrial Services Malaysia Sdn Bhd; (I) Nalco Pakistan Ltd.; (J) Nalco Energy Services Nigeria Ltd.; (K) Nalco Energy Services Equatorial Guinea L.L.C.; (L) Nalfloc Limited; (M) ONES West Africa L.L.C.; (N) Nalco Energy Services Middle East Holdings, Inc.; (O) Nalco ZAO (Russia), (P) Nalco Hellas, S.A. (Greece); (Q) Nalco Hong Kong Limited; Nalco Industrial Services (Thailand) Co., Ltd; and (R) Nalco Anadolu Kimya Sanayii Ve Ticaret A.S. (Turkey); and the other Related Section; provided, that the amount of each such increase in respect of one Related Section U.S. Borrower shall be treated as having been used under permitted to effect the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than contribution described in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith foregoing clause (E) by the Borrower first contributing such Equity Interests to a newly formed Delaware limited liability company (“Newco LLC”) and may be determined either, at the option then contributing all of the Borrower, at the time of such Investment Equity Interest in Newco LLC to NUH; and
(iii) Nalco Global Holdings LLC and Nalco International Holdings LLC contributing (directly or as indirectly) all of the date of the definitive agreement with respect Equity Interests owned by them on December 15, 2006, in Nalco Industrial Services (Thailand) Co. Ltd and Nalco Anadolu Kimya Sanayii Ve Ticaret A.S. (Turkey) to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofNUH.
Appears in 1 contract
Samples: Credit Agreement (Nalco Holding CO)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) (excluding for purposes of the calculation in this proviso any Investment made at a time when, immediately after giving effect thereto, the Net First Lien Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00, which Investment shall be permitted under this Section 6.04(b) without regard to such calculation), shall not exceed the sum of (X) the greater of (1) $15,000,000150,000,000 and (2) 0.80 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $10,000,00020,000,000 and 1% of Consolidated Total Assets as of the end of the then most recently ended Test Period, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;business; Table of Contents
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 150,000,000 and 0.50 0.80 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
; Table of Contents (o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: First Lien Credit Agreement (Hospitality Distribution Inc)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), Investment except:
(a) [reserved];
(i) Investments by in Holdings, the Borrower or any Subsidiary other Restricted Subsidiary, or in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary person that, as a result of such Investment); , becomes a Restricted Subsidiary or is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Holdings, the Borrower or a Restricted Subsidiary, and
(ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000hereunder;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by Holdings, the Borrower or any Subsidiary of the other Restricted Subsidiaries of non-cash consideration for the Disposition sale or other disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, managers and employees or consultants of the Borrower any Parent Entity or any Subsidiary of its Restricted Subsidiaries
(i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, 15.0 million in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof),
(ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, case incurred in the ordinary course of business or consistent with past practice and or
(iviii) in connection with such person’s the purchase of Equity Interests of the Borrower any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower Holdings or any of its Restricted Subsidiaries in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Hedge Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted by Section 6.01(c);
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 6.04(h) and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment Investments existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Date);
(i) Investments resulting from pledges and deposits under Sections 6.02(fthe following clauses of Section 6.02: (a), (f), (g), (ok), (q), (r), (s), (ee) and (llee);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite downs or write offs thereof) not to exceed exceed
(i) at the greater time of $50,000,000 the making of such Investment (and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment after giving effect thereto) and together with all outstanding Investments pursuant to this Section 6.04(j6.04(j)(i), the greater of (A) $200.0 million and (B) 9.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements are available (plus, without duplication of the last paragraph of this Section 6.04, any returns of capital actually received by the respective investor in respect of Investments theretofore made by it pursuant to this clause (j)(i)) plus
(ii) so long as no Specified Event of Default has occurred and is made in any person that was not a Subsidiary continuing as of the making of such Investment, the portion, if any, of the Available Amount on the date on which of such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at election that the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed Borrower elects to have been made pursuant apply to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j6.04(j)(ii);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between among Foreign Subsidiaries that are not Loan Parties and Guarantees by Foreign Subsidiaries that are not Loan Parties permitted by Section 6.01(m6.01(n);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case case, in the ordinary course of business or consistent with past practice or and Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by Holdings, the Borrower or any of the other Restricted Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary of Holdings acquired after the Closing Date or of a person an entity merged into into, or consolidated or amalgamated with, Holdings, the Borrower or merged into or consolidated with a any other Restricted Subsidiary after the Closing Date, in each case, ,
(i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, ,
(ii) in the case of any acquisition, merger merger, consolidation or consolidationamalgamation, in accordance with Section 6.05 and 6.05, and
(iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, consolidation or consolidation amalgamation and were in existence on the date of such acquisition, merger merger, consolidation or consolidationamalgamation;
(o) acquisitions by the Borrower of obligations of one or more officers directors, officers, managers or other employees of any Parent Entity, the Borrower or its Subsidiaries any other Restricted Subsidiary in connection with such director’s, officer’s, manager’s or employee’s acquisition of Equity Interests of the Borrowerany Parent Entity, so long as no cash is actually advanced by the Borrower or any of the other Restricted Subsidiaries to such officers directors, officers, managers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized for the avoidance of doubt, excluding Finance Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case case, entered into by Holdings, the Borrower or any Subsidiary of the other Restricted Subsidiaries in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrowerany Parent Entity;
(r) Investments in consisting of the redemption, purchase, repurchase or retirement of any Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(ts) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customerscustomers consistent with past practices;
(u) [reserved];
(vt) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(wu) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its SubsidiariesHoldings, including loans to any direct or indirect parent of the Borrower, if the Borrower or any of the other Subsidiary Restricted Subsidiaries;
(v) Investments, including loans and advances, to any Parent Entity so long as Holdings, Borrower or any of the other Restricted Subsidiaries would otherwise be permitted to make a Restricted Payment in such amount (provided, amount; provided that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(yw) Investments consisting of Securitization Assets the licensing or arising as a result contribution of Permitted Securitization Financingsintellectual property pursuant to joint marketing arrangements with other persons;
(zx) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property intellectual property in each case in the ordinary course of business or consistent with past practicebusiness, to the extent such purchases and acquisitions constitute Investments;
(bby) [reserved]Investments received substantially contemporaneously in exchange for Equity Interests of any Parent Entity;
(ccz) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties ventures and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.Unrestricted Subsidiaries,
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practicepractice or industry norm), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of Holdings (or any Parent Entity), the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice or industry norm in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practicepractice or industry norm, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice or industry norm and (iv) in connection with such person’s purchase of Equity Interests of the Borrower or Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice or industry norm and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers or customers made in the ordinary course of business or consistent with past practicepractice or industry norm;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and (provided, that any such Investment that is in excess of $5,000,000 shall be set forth on Schedule 6.04 6.04) and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (X) the greater of $50,000,000 140,000,000220,500,000 and 0.50 0.30 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y), which such election shall (unless such Investment is made pursuant to clause (a) of the definition of “Cumulative Credit”) be set forth in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Cumulative Credit elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, repurchases, redemptions, income and similar amounts) actually received in respect of any such Investment; provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or industry norm or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a person that becomes a Subsidiary acquired after the Closing Date (including by means of a Delaware LLC Division) or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 (other than Section 6.05(e)(i)) and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower or any Subsidiary of obligations of one or more directors, consultants, officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such directors, consultants, officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicepractice or industry norm;
(q) Investments to the extent that payment for such Investments is made with or financed with the proceeds of the sale or issuance of Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that any proceeds of such sale or issuance of Equity Interests are not included in any determination of the Cumulative Credit;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice or industry norm consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved]loans and leases of animals to third parties for the purposes of exhibition, storage or breeding, as the case may be, in each case in the ordinary course of business and consistent with past practices;
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) (provided, that the outstanding amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 solely for all purposes of this Agreementdetermining capacity thereunder);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization FinancingsFinancings or receivables sales or similar factoring arrangements of Receivables Assets;
(z) loans Investments made in connection with obtaining, maintaining or advances to members representing their deferred initiation deposits or fees, arising renewing client and customer contracts in the ordinary course of business or consistent with past practicepractice or industry norm;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses licenses, leases or leases contributions of Intellectual Property in each case in the ordinary course of business or consistent with past practicepractice or industry norm;
(bb) [reserved]Investments received substantially contemporaneously in exchange for Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that the issuance of such Equity Interests are not included in any determination of the Cumulative Credit;
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the sum of (X) the greater of $40,000,000 140,000,000220,500,000 and 0.40 0.30 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, repurchases, redemptions, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved]Investments in Similar Businesses in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed the sum of (X) the greater of $140,000,000220,500,000 and 0.30 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, repurchases, redemptions, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment pursuant to this Section 6.04(dd) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) and not in reliance on this Section 6.04(dd);
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed the sum of (X) the greater of $15,000,000140,000,000220,500,000 and 0.30 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, repurchases, redemptions, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 4.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved];
(hh) [reserved]; and
(hhii) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b6.04(j), 6.04(cc), 6.04(dd) or Section 6.04(j6.04(ee) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party Guarantor that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), Investment except:
(a) [reserved];
(i) Investments held by the Borrower or any Subsidiary Company in the Equity Interests form of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments or that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(eb) loans and or advances to, or Guarantees of Indebtedness of, to officers, directors, employees or employees, consultants and independent contractors of the Borrower or any Subsidiary Company (i) in the for travel, entertainment, relocation and analogous ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000purposes, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such personPerson’s purchase of Equity Interests of the Borrower solely Borrower; provided that no cash or Permitted Investments are actually advanced pursuant to this clause (ii), and (iii) for any other purposes not described in the extent foregoing clauses (i) and (ii); provided that the aggregate principal amount of such loans outstanding at any time under clauses (i) (other than for travel and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted entertainment in the ordinary course of business business) and (iii) above shall not exceed $4,312,500;
(c) Investments by (x) (i) any Company in Borrower or consistent with past practice any wholly-owned Subsidiary of Borrower that is a Guarantor or a Broker-Dealer and (ii) any assets wholly-owned Subsidiary of Borrower in Borrower or securities received a wholly-owned Subsidiary of Borrower that is a Guarantor or a Broker Dealer; provided that any such Investments by a Loan Party in satisfaction or partial satisfaction thereof from financially troubled account debtors a Non-Loan Party shall be made in the form of Indebtedness, and such Non-Loan Party shall provide a note evidencing such Indebtedness to such Loan Party, which note shall be pledged to the Collateral Agent pursuant to the Security Documents and (y) a Guarantor that is not a Subsidiary Guarantor in another Guarantor that is not a Subsidiary Guarantor;
(d) to the extent reasonably necessary in order constituting Investments, transactions expressly permitted (other than by reference to prevent or limit loss Section 6.03) under Sections 6.01, 6.02, 6.04 (including the receipt of noncash consideration for the dispositions of assets permitted thereunder), 6.05 and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice6.06;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(he) Investments existing (i) in existence on, or contractually committed as ofthat are made pursuant to legally binding written commitments that are in existence on, the Closing Date and that are set forth on Schedule 6.04 6.03, and (ii) any extensionsmodification, renewalsreplacement, replacements renewal or reinvestments extension thereof; provided no such modification, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above replacement, renewal or extension shall increase the amount of such Investment existing or committed on the Closing Date (other than Investments then permitted under this Section 6.03(e) except pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.046.03;
(f) Investments in Hedging Agreements permitted under Section 6.01;
(g) promissory notes and other noncash consideration received in connection with dispositions permitted by Section 6.04(b);
(ih) Investments resulting from pledges and deposits under Sections 6.02(f)other than in respect of any Pending Acquisition, the purchase or other acquisition (g), (o), (r), (s), (eein one transaction or a series of related transactions) and (ll);
(j) Investments by the Borrower of all or any Subsidiary in an aggregate outstanding amount (valued at the time substantially all of the making property and assets or business of any Person or of assets constituting a business unit, a line of business or division of such Person, or the Equity Interests in a Person that, upon the consummation thereof, will be a Company (including as a result of a merger or consolidation and without giving effect to including the deferred purchase of any subsequent change remaining minority interests in valueany such Company) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on (each, a Pro Forma Basis for the then most recently ended Test Period“Permitted Acquisition”); provided that if any Investment that, with respect to each purchase or other acquisition made pursuant to this Section 6.04(j6.03(h):
(A) is made in each applicable Loan Party and any person that was not a Subsidiary on such newly created or acquired Company shall comply with the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option requirements of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (5.10 to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)applicable;
(kB) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately continuing or would result therefrom;
(C) after giving effect Pro Forma Effect to the consummation of such InvestmentPermitted Acquisition (and any Indebtedness incurred or repaid upon such consummation), the Net Total Secured Leverage Ratio on shall be no greater than 2.75: 1.00 (and the Borrower shall have provided to the Administrative Agent a Pro Forma Basis exceeds 1.75 certificate in reasonable detail as to 1.00, the calculation of such Secured Leverage Ratio); and
(D) any such Person so acquired or purchased (1) shall become upon such consummation of such purchase or acquisition a wholly-owned Subsidiary of Borrower that is a Broker-Dealer or become a Subsidiary Guarantor and any assets or business so acquired shall upon such consummation be held by Borrower or a wholly-owned Subsidiary of Borrower that is a Broker-Dealer or a Subsidiary Guarantor or (2) shall become upon the consummation of such purchase or acquisition a Non-Loan Party that is a Subsidiary of Borrower (provided that the aggregate outstanding amount consideration so expended for all purchases and acquisitions in reliance of this clause (valued at the time of the making thereof, and without giving effect to any subsequent change in value2) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall this clause (D) does not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m11,500,000);
(mi) Investments in the ordinary course of business consisting of (i) endorsements for collection or deposit and (ii) customary trade arrangements with customers;
(j) Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of, or of suppliers and customers and in settlement of delinquent accounts obligations of, and other disputes with or judgments againstwith, customers and suppliers, in each case suppliers arising in the ordinary course of business or consistent with past practice or Investments acquired by and upon the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments Investment or other transfer of title with respect to any secured Investment;
(k) the licensing, sublicensing or contribution of Intellectual Property pursuant to joint marketing arrangements with Persons other than the Companies in the ordinary course of business;
(l) other Investments as valued at the fair market value of such Investment at the time each such Investment is made; provided that the aggregate amount of all such Investments made pursuant to this clause (l) measured at the time such Investment is made shall not exceed $23,000,000 (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in defaultvalue);
(m) Investments in Similar Businesses; provided that the aggregate amount of all such Investments made pursuant to this clause (m) measured at the time such Investment is made shall not exceed $23,000,000 (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);
(n) Investments to the extent that payment for such Investments is made solely by the issuance of Equity Interests (other than Disqualified Stock) of the Borrower or RCAP Holdings to the seller of such Investments;
(o) Investments of a Subsidiary Person that is acquired and becomes a Company or of a Person merged or amalgamated or consolidated into any Company, in each case after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, and in accordance with this Section 6.05 and (iii) 6.03 and/or Section 5.10, as applicable, to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(op) acquisitions Investments made with the portion, if any, of (x) the Available Amount or (y) Cumulative Retained Equity Amount, in each case on the date that the Borrower elects to apply all or a portion thereof to this Section 6.03(p); provided that immediately after giving Pro Forma Effect to any such Investment no Event of Default shall be continuing;
(q) the forgiveness or conversion to equity of any Indebtedness owed to a Loan Party and permitted by Section 6.01;
(r) advances of payroll payments to employees, consultants or independent contractors or other advances of salaries or compensation to employees, consultants or independent contractors, in each case in the ordinary course of business;
(s) additional Companies may be established or created if the RCS Companies and such Companies comply with the requirements of Section 5.10 to the extent applicable and any Investments in such additional Companies are permitted by the Borrower other clauses of obligations this Section 6.03;
(t) Guarantees of one any Company of leases entered into in the ordinary course of business;
(u) the Merger;
(v) Investments consisting of contributions by any Company and/or any Subsidiary of any Company to the capital of any Broker-Dealer to the extent such Investments are required by applicable law or more officers or other employees regulation;
(w) Investments by any Company in the Equity Interests of Persons that are affiliated with independent Financial Advisors of the Borrower or its Subsidiaries in connection with such officer’s an aggregate amount at any time outstanding not to exceed $17,250,000;
(x) the Pending Acquisitions; provided that each applicable Loan Party and any newly created or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees acquired Company in connection with the acquisition Pending Acquisitions shall comply with the requirements of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments Section 5.10 to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or personsapplicable; provided, provided that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 both before and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contributionPending Acquisition, no Default or Event of Default shall have occurred and or be continuing and (ii) each Pending Acquisition shall be consummated in accordance with the applicable Pending Acquisition Agreement, without any amendment, modification, waiver or would result therefromconsent thereunder (other than any amendment, modification, waiver or consent that is not materially adverse to the interests of the Lenders);
(y) Investments in the fair market value (as determined in good faith by form of ordinary course loans to Financial Advisors; affiliated with the Borrower) of the assets so contributed and , consistent with past practice in an aggregate amount for such loans at any time outstanding not to exceed $28,750,000; and
(z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection in one or deposit and Uniform Commercial Code Article 4 customary trade arrangements more mutual funds designated by a Financial Advisor who is affiliated with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except the Borrower, to the extent that such Guarantee is expressly subject to this Section 6.04);
Investments comprise part of such Financial Advisor’s deferred compensation plan. Notwithstanding the foregoing, no Company nor any Subsidiary of any Company (w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower other than First Allied and its Subsidiaries, including loans to ) may make any direct or indirect parent of the Borrower, if the Borrower Investment in First Allied or any of its Subsidiaries (other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if than any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, existing at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at until such time under as the other Related Section; provided, that the amount of each such increase in respect of one Related Section First Allied Repayment shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofhave occurred.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make capital contributions or any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) ), shall not exceed the sum of (X) the greater of $15,000,0005,000,000 and 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) with respect to any Investment made pursuant to clause (X), an amount equal to any returns of capital actually received in respect of any such Investment pursuant to clause (X) (not exceeding the amount of the original investment), it being understood and agreed that clause (Y) replenishes clause (X) and shall not create additional Investment capacity beyond the amount available under clause (X);
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $10,000,000, 5,000,000 and 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (j), (g), (o), (r), (s), (ee) and (ll);
(ji) during the Transition Period, other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $50,000,000, and (ii) from and after the greater end of $50,000,000 the Transition Period, other Investments by the Borrower or any Subsidiary so long as, immediately prior to, and 0.50 times pro forma for such Investment and any relayed transactions, the EBITDA Net Secured Leverage Ratio calculated on a Pro Forma Basis for the then most recently ended Test PeriodPeriod shall not exceed 3.75 to 1.00; provided that (A) if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but thereafter, pursuant to a separate and unrelated transaction, becomes a Subsidiary thereafterpursuant to an acquisition permitted under Section 6.04(k), then such Investment may, at the option of the Primary Borrower, upon such person becoming a Subsidiary and for so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Subsidiary Loan Party) and not in reliance on this Section 6.04(j), provided that, any Investment so deemed shall not replenish or otherwise increase the capacity available pursuant to Section 6.04(k) and (B) immediately prior to, and after giving effect to such Investment, no Default or Event of Default shall have occurred or be continuing or would result therefrom;
(k) Investments constituting Permitted Business Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite downs or write offs thereof) not to exceed the greater of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,00020,000,000 and 0.066 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Primary Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Primary Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Primary Borrower, so long as no cash is actually advanced by the any Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Primary Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied[reserved];
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Primary Borrower, if the Primary Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06 in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under under, and subject to, the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings[reserved];
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice[reserved];
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved];Investments received substantially contemporaneously in exchange for Equity Interests of the Primary Borrower; and
(cc) Investments in joint ventures; provided that (i) the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent changes in valuewrite-downs or write-offs thereof) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the sum of (X) the greater of $40,000,000 5,000,000 and 0.40 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; providedPeriod plus (Y) with respect to any Investment made pursuant to clause (X), an amount equal to any returns of capital actually received in respect of any such Investment pursuant to clause (X) (not exceeding the amount of the original investment), it being understood and agreed that clause (Y) replenishes clause (X) and shall not create additional Investment capacity beyond the amount available under clause (X), and (ii) if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but thereafter, pursuant to a separate and unrelated transaction, becomes a Subsidiary thereafterpursuant to an acquisition permitted under Section 6.04(k), then such Investment may, at the option of the Primary Borrower, upon such person becoming a Subsidiary and for so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Subsidiary Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments; provided that, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was so deemed shall not a Subsidiary on replenish or otherwise increase the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made capacity available pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee6.04(k);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the a Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents Permitted Investments shall be the fair market value thereof, which shall be thereof (as determined by the Primary Borrower in good faith by the Borrower and may be determined either, at the option of the Borrower, faith) valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change write-downs or write-offs thereof. Notwithstanding anything herein to the contrary, prior to the date that the MUFG facility has been paid in value. The full and Redbox Entertainment and its Subsidiaries shall have become Guarantors and Subsidiary Loan parties hereunder and taken the actions with respect there under Section 5.10, (A) (i) the aggregate outstanding amount of any Investment outstanding at any time Investments made pursuant to this Section 6.04 in (x) non-Loan Party Subsidiaries (other than Redbox Entertainment, which shall be subject to the original cost limitations set forth in clauses (i)(y) and (i)(z), as applicable) shall not exceed $5,000,000 and (y) for so long as Redbox Entertainment is a Loan Party, Redbox Entertainment shall not exceed $20,000,000, (ii) the aggregate outstanding amount of such Investments in joint ventures made pursuant to this Section 6.04 shall not exceed $5,000,000 and (iii) all Investments made in (x) non-Loan Party Subsidiaries and joint ventures and (y) Redbox Entertainment (other than those intellectual property and film assets set forth on Schedule 1.01(D)) shall, in each case, consist of cash and/or Permitted Investments (provided that it is understood that any non-exclusive license of Intellectual Property not prohibited pursuant to Section 5.01(d) shall not constitute an Investment, reduced by any returns ) and (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income B) Redbox Entertainment and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need its Subsidiaries shall not be permitted solely by reference to one category of permitted make any Investments in any Affiliate thereof (other than the Borrower or any portion Subsidiary thereof) described ). Notwithstanding anything in Section 6.04(a) through (hh) but may be permitted the foregoing to the contrary, no Loan Party shall make any Investments in part under any combination thereofnon-Loan Party after the First Amendment Effective Date.
Appears in 1 contract
Samples: Credit Agreement (Chicken Soup for the Soul Entertainment, Inc.)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person Person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities investments, loans or advances incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or and consistent with past practice)practices of Holdings and the Subsidiaries) to or guarantees of the obligations of, or make or permit to exist any investment in (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other Person, except:
(a) [reserved]guarantees by Holdings or any Subsidiary of operating leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by Holdings or any Subsidiary in the ordinary course of business;
(i) Investments by the Borrower Holdings or any Subsidiary in the Equity Interests Interests, evidence of the Borrower Indebtedness or other securities of Holdings or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower Holdings or any Subsidiary to the Borrower Holdings or any Subsidiary; and (iii) Guarantees guarantees by the Borrower Holdings or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of the Borrower Holdings or any Subsidiary; provided that, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries that are not Subsidiary Loan PartiesNon-Guarantor Subsidiaries, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries (other than Borrower) that are not Subsidiary Loan Parties Non-Guarantor Subsidiaries pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties guarantees of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties Non-Guarantor Subsidiaries pursuant to subclause clause (iii) (other than, in each case, to the extent such Investments, Loans or guarantees are made (1) by any subsidiary of Borrower that is a Non-Guarantor Subsidiary or (2) by a Non-Guarantor Subsidiary in or to another Non-Guarantor Subsidiary) shall not exceed an aggregate amount equal to $15,000,0002.0 million;
(c) Permitted Investments and Investments investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with with, or as a Division Successor pursuant to the Division of, a person that is not a Wholly Owned Subsidiary immediately prior to such mergermerger or Division) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Guarantees permitted by Section 6.01(w) and (cc)(ii);
(i) Investments by the Borrower any Loan Party in any Loan Party;
(ii) Investments by any Subsidiary that is not a Loan Party in any Loan Party or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become is not a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and Loan Party;
(iii) Guarantees by the Borrower other intercompany liabilities amongst Parent and its Subsidiaries (or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (isolely amongst its Subsidiaries) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after in connection with the Closing Date cash management operations of Parent and its Subsidiaries; and
(iv) Investments by any Borrower or any Guarantor in any Subsidiary that is not a Loan Party consisting solely of (x) the contribution or other Disposition of Equity Interests or Indebtedness of any other Subsidiary that is not a Loan Parties Party held directly by any Borrower or such Guarantor in exchange for Indebtedness, Equity Interests (or additional share premium or paid in capital in respect of Equity Interests) or a combination thereof of the Subsidiary to Subsidiaries which such contribution or other Disposition is made, (y) an exchange of Equity Interests of any other Subsidiary that are is not a Loan Party for Indebtedness of such Subsidiary or (z) Investments in the form of loans or other Indebtedness of, advances to, purchases of Equity Interests in, or contributions of cash or Permitted Investments to, any Subsidiary that is not a Loan Parties Party; provided, that immediately following the consummation of an Investment pursuant to subclause the preceding clause (iix) or (y), plus (C) outstanding Guarantees by the Loan Parties Subsidiary whose, Equity Interests or Indebtedness are the subject of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000such Investment remains a Subsidiary;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower Parent or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower Parent or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityParent;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(hi) Investments existing onor committed, or contractually committed anticipated to exist in the future, as ofof the Signing Date, and, (A) with respect to all such investments in an aggregate amount in excess of $35,000,000 or (B) in the Closing case of any such Investment anticipated on the Signing Date and to exist in the future, set forth on Schedule 6.04) and (ii) Investments existing or committed, or anticipated to exist in the future, on the Spinoff Date (provided that any Investments incurred pursuant to this clause (h)(ii) shall be permitted only if the Administrative Agent consents thereto (in its reasonable discretion) and Schedule 6.04 is updated accordingly to include such Investments), and any extensions, renewals, replacements or reinvestments thereofof Investments permitted by this clause (h), so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Signing Date or Spinoff Date, as applicable (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Signing Date or Spinoff Date, as applicable, or as otherwise permitted by this Section 6.04);
(i6.04);(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (llii);
(j) other Investments by the Borrower Parent or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 1,000200,000,000 and 0.50 times the EBITDA calculated 102.0% of Consolidated Total Assets when made, plus (Y) so long as no Default or Event of Default shall have occurred and be continuing and Parent shall be inthe Total Net Leverage Ratio on a Pro Forma Basis for Compliance with the then most recently ended Test PeriodFinancial CovenantBasis is not greater 4.50:1.00, any portion of the Available Amount on the date of such election that the Borrower Representative elects to apply to this Section 6.04(j)(Y) in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail of the Available Amount immediately prior to such election and the amount thereof elected to be so applied, plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the BorrowerParent, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower Parent or a Subsidiary as a result of a foreclosure by the Borrower Parent or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Signing Date or of a person merged into the Borrower Parent or merged into or consolidated with a Subsidiary after the Closing Signing Date, in each case, (i) to the extent such acquisition, merger merger, amalgamation or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger merger, amalgamation or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(on) acquisitions by the Borrower Parent or any Subsidiary of obligations of one or more officers or other employees of the Borrower Parent or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerParent, so long as no cash is actually advanced by the Borrower Parent or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Borrower Parent or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (b), (e), (f), (g), (h), (i), (j) or (k) of the definition thereof, in each case entered into by the Borrower Parent or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qp) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or personsParent; provided, that (i) the fair market value issuance of such assets, determined Equity Interests are not included in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer any determination of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedAvailable Amount;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(ur) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower Parent or such any Subsidiary;
(xt) Investments by Parent and the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower Parent or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06(g) in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 6.06(g) for all purposes of this Agreement);
(yu) Investments consisting of Securitization transfers of Permitted Receivables Facility Assets or arising as a result of Permitted Securitization FinancingsQualified Receivables Facilities;
(zv) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits joint marketing or fees, arising in the ordinary course of business or consistent other similar arrangements with past practiceother persons;
(aaw) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bbx) [reserved];
(ccy) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted fixed income or other assets by the proviso thereto in the case of any Subsidiary that is not a Loan Partyso-called “captive” insurance company (each, an “Insurance Subsidiary”) and not in reliance on this Section 6.04(cc)consistent with customary practices of portfolio management;
(ddz) [reserved];Investments made in connection with the Transactions; and
(eeaa) Investments in any Unrestricted Subsidiaries after giving effect to the applicable additional Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, at the time any such Investment is made and immediately after giving effect to such Investmentthereto, the Total Net Total Leverage Ratio on a Pro Forma Basis would is not exceed greater than 1.75 to 1.00; provided that no Event . For purposes of Default shall have occurred determining compliance with this Section 6.04, (A) an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Sections 6.04(a) through (aa) but may be permitted in part under any relevant combination thereof and be continuing;
(gg) [reserved]; and
(hh) Investments made (iB) in connection with the exercise event that an Investment (or any portion thereof) meets the criteria of one or more of the categories of permitted Investments (or any subscriptionsportion thereof) described in Sections 6.04(a) through (aa), optionsthe Borrower Representative may, warrantsin its sole discretion, calls, puts classify or other rights divide such Investment (or commitments pursuant to agreements set forth on Schedule 3.08(b) or (iiany portion thereof) in satisfaction any manner that complies with this Section 6.04 and will be entitled to only include the amount and type of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at such Investment (or any time pursuant to the proviso portion thereof) in Section 6.04(bone or more (as relevant) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at above clauses (or any portion thereof) and such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section Investment (or any portion thereof) shall be treated as having been used made or existing pursuant to only such clause or clauses (or any portion thereof); provided, that all Investments described in Schedule 6.04 shall be deemed outstanding under the other Related SectionSection 6.04(b) or Section 6.04(h), as applicable. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, Fair Market Value thereof valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (write-downs or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination write-offs thereof.
Appears in 1 contract
Samples: Credit Agreement (Adient PLC)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestscapital stock, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to exist any investment or Guarantees of the Indebtedness of any other person (interest in, any other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)person, except:
(a) [reserved];
investments (i) Investments by existing on the Borrower or any Subsidiary date hereof in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result Subsidiaries of such Investment)Holdings; (ii) intercompany loans from by Holdings in the Borrower or any Subsidiary to Equity Interests of the Borrower or any SubsidiaryBorrower, CapCo II and Opco GP; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder the Borrower in any 90% Subsidiary of the Borrower or any Subsidiary; provided that, that is a Guarantor (so long as at any date of determination, the aggregate outstanding amount (valued at the time such Guarantor shall remain a 90% Subsidiary of the making thereof, and without Borrower after giving effect to such investment); (iv) by any subsequent change 90% Subsidiary of the Borrower in valueany Wholly Owned Subsidiary of the Borrower that is a Guarantor; or (v) by any Subsidiary of the Borrower that is not a Guarantor in any 90% Subsidiary of the Borrower that is not a Guarantor (A) Investments made so long as such Subsidiary shall remain a 90% Subsidiary of the Borrower after the Closing Date by the Loan Parties pursuant giving effect to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iisuch investment), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(cb) Permitted Investments and Investments investments that were Permitted Investments when made;
(dc) Investments investments arising out of the receipt by the Borrower or any Subsidiary of non-cash the Borrower of noncash consideration for the Disposition sale of assets permitted under Section 6.05, provided that such consideration (if the stated amount or value thereof is in excess of $2,000,000) is pledged upon receipt pursuant to the Pledge Agreement to the extent required hereby and thereby;
(ed) intercompany loans permitted to be incurred as Indebtedness under Sections 6.01(a), (f), (n), (o) and (v);
(i) loans and advances toto employees of Holdings, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or their Subsidiaries not to exceed $3,000,000 in the aggregate at any Subsidiary time outstanding (icalculated without regard to write-downs or write-offs thereof) and (ii) advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fi) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any (ii) prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Interest Rate Protection Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted pursuant to Section 6.01(d);
(h) Investments investments existing on, or contractually committed as of, on the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments investments resulting from pledges and deposits under Sections 6.02(f), referred to in Section 6.02(g) or (g), (o), (r), (s), (ee) and (llh);
(j) Investments other investments by the Borrower or any Subsidiary and its Subsidiaries in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $20,000,000 (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodinvestments theretofore made by it pursuant to this clause (j)); provided that if at any Investment time additional investments may be made pursuant to this Section 6.04(jclause (j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option election of the Borrower, upon which additional investments pursuant to this proviso shall only be permitted to the extent that the Borrower so elects (x) to apply an amount not to exceed the Available Investment Basket Amount at such person becoming a Subsidiary and time to the making of the respective investment pursuant to this clause (j) and/or (y) to make additional investments pursuant to this clause (j) with the proceeds of Growth Capital Revolving Loans (so long as the amount of proceeds of Growth Capital Revolving Loans so applied at any time does not exceed the amount of proceeds of Designated Capital Contributions used at such person remains a Subsidiary, be deemed to have been made time pursuant to Section 6.04(b) this clause (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyj)) and not in reliance on this Section 6.04(j)Designated Capital Contributions;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, investments by the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event Borrower and its Subsidiaries in Foreign Subsidiaries of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the Borrower in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change write-downs or write-offs thereof) not to exceed $20,000,000 (plus any returns of capital actually received by the respective investor in valuerespect of investments theretofore made by it pursuant to this clause (k)); provided that at any time additional investments may be made pursuant to this clause (k) at the election of Permitted Acquisitions the Borrower, which additional investments pursuant to this proviso shall only be permitted to the extent that the Borrower so elects (x) to apply an amount not to exceed the Available Investment Basket Amount at such time to the making of Subsidiaries that are not Subsidiary Loan Parties or the respective investment pursuant to this clause (k) and/or (y) to make additional investments pursuant to this clause (k) with the proceeds of assets that are not owned by Subsidiary Loan Parties shall Growth Capital Revolving Loans (so long as the amount of proceeds of Growth Capital Revolving Loans so applied at any time does not exceed $65,000,000the amount of proceeds of Designated Capital Contributions used at such time pursuant to this clause (k)) and Designated Capital Contributions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m)investments constituting Permitted Business Acquisitions;
(m) Investments received in connection with Holdings shall be permitted to contribute the bankruptcy or reorganization of, or settlement proceeds of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in Designated Capital Contributions to the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultBorrower;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions investments by the Borrower of obligations of one or more officers or other employees of the Borrower or and its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerJoint Ventures, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, aggregate amount so contributed invested pursuant to this clause (rn) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes write-downs or write-offs thereof) does not exceed $10,000,000 (plus any returns of capital actually received by the respective investor in value) respect of Investments investments theretofore made after the Closing Date by it pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodclause (n)); provided, provided that if at any Investment time additional investments may be made pursuant to this Section 6.04(ccclause (n) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, which additional investments pursuant to this proviso shall only be increased by permitted to the extent that the Borrower so elects (x) to apply an amount not to exceed the Available Investment Basket Amount at such time to the making of the respective investment pursuant to this clause (n) and/or (y) to make additional investments pursuant to this clause (n) with the proceeds of Growth Capital Revolving Loans (so long as the amount of Investments that could be made proceeds of Growth Capital Revolving Loans so applied at any time does not exceed the amount of proceeds of Designated Capital Contributions used at such time under pursuant to this clause (n)) and Designated Capital Contributions;
(o) investments consisting of the other Related Section; provided, that purchase of the amount of each such increase remaining minority interest in respect of one Related Section shall be treated as having been used under Xxxxxx Packaging do Brasil Industria e Comercio S.A.;
(p) the other Related Section. Any Investment in any person other than IPO Reorganization;
(q) the Borrower or a Subsidiary Loan Party that and its Subsidiaries may enter into and perform its obligations under Other Hedging Agreements entered into in the ordinary course of business and so long as any such Other Hedging Agreement is otherwise not speculative in nature;
(r) investments expressly permitted by this Section 6.04 6.05; and
(s) additional investments may be made through intermediate Investments in Subsidiaries that are not Loan Parties from time to time to the extent made with proceeds of Equity Interests (excluding proceeds of Designated Capital Contributions and such intermediate Investments shall be disregarded for purposes proceeds received as a result of determining the outstanding amount exercise of Investments Cure Rights pursuant to any clause set forth above. The amount Section 7.02) of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereofHoldings, which shall be determined proceeds or investments in good faith by the Borrower and may be determined either, at the option of turn are contributed to the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Neither Borrower nor any Restricted Subsidiary will, directly or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsindirectly, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of Investment, except for the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), exceptfollowing:
(a) [reserved]Investments and commitments to make Investments outstanding on the Closing Date and identified on Schedule 10.04 and any Investments received in respect thereof without the payment of additional consideration (other than through the issuance of or exchange of Qualified Capital Stock);
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; cash and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Cash Equivalents;
(c) Permitted Investments Borrower and Investments that were Permitted Investments when madeits Restricted Subsidiaries may enter into Swap Contracts to the extent permitted by Section 10.01(c);
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) by Borrower in any Restricted Subsidiary, (ii) by any Restricted Subsidiary in Borrower and (iii) by a Restricted Subsidiary in another Restricted Subsidiary (provided that Investments pursuant to clauses (i) and (iii) by Credit Parties in Non-Credit Parties shall not exceed (x) the ordinary course greater of business or consistent with past practice in an aggregate outstanding amount (valued $150.0 million and 15.0% of Consolidated EBITDA at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis determination for the then Test Period most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by plus (y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes );
(e) Borrower and its Restricted Subsidiaries may sell or transfer assets to the extent permitted by Section 10.05;
(f) Investments in securities of determining trade creditors or customers or suppliers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or suppliers or in settlement of delinquent or overdue accounts in the ordinary course of business or Investments acquired by Borrower as a result of a foreclosure by Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(g) Investments made by Borrower or any Restricted Subsidiary as a result of consideration received in connection with an Asset Sale (or transfer or disposition not constituting an Asset Sale) made in compliance with Section 10.05;
(h) Investments consisting of (i) moving, entertainment and travel expenses, drawing accounts and similar expenditures made to officers, directors, managers and employees in the ordinary course of business, (ii) loans or advances to officers, directors, managers and employees in connection with such Persons’ purchase of Equity Interests of Borrower (provided that the amount of such loans and advances described in this covenantclause (h)(ii) shall be contributed to Borrower in cash as common equity) and (iii) other loans or advances to officers, an Investment need directors, managers and employees for any other purpose not be described in the foregoing clauses (i) and (ii); provided that the aggregate principal amount outstanding at any time under the foregoing clauses (ii) and (iii) shall not exceed $25.0 million in the aggregate at any time outstanding;
(i) Permitted Acquisitions;
(j) extensions of trade credit (including to gaming customers) and prepayments of expenses in the ordinary course of business;
(k) in addition to Investments otherwise permitted solely by reference to one category of permitted this Section 10.04, other Investments (by Borrower or any portion thereofof its Restricted Subsidiaries in an amount not to exceed the sum of, subject to Section 1.07, (i) described the greater of $250.0 million and 25.0% of Consolidated EBITDA at the time of determination for the Test Period most recently ended during the term of this Agreement plus (ii) the Initial Restricted Payment Base Amount as of such date plus (iii) the Specified 10.04(k) Investment Returns received on or prior to such date plus (iv) any reduction in the amount of such Investments as provided in the definition of “Investments”;
(l) in addition to Investments otherwise permitted by this Section 6.04(a10.04, Investments by Borrower or any of its Restricted Subsidiaries; provided that, subject to Section 1.07, (i) through the amount of such Investments to be made pursuant to this Section 10.04(l) do not exceed the Available Amount determined at the time such Investment is made, (hhii) but may immediately before and after giving effect thereto, no Event of Default has occurred and is continuing and (iii) except for Investments made in reliance on clause (e), (f) or (g) of the definition of “Available Amount”, immediately after giving effect thereto Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenant (regardless of whether then applicable) as of the most recent Calculation Date;
(m) additional Investments so long as, at the time such Investment is made and after giving effect thereto, subject to Section 1.07, (x) no Event of Default has occurred and is continuing, (y) the Consolidated Total Net Leverage Ratio is less than or equal to 4.00 to 1.00 on a Pro Forma Basis as of the most recent Calculation Date and (z) immediately after giving effect to such Investment, Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenant (regardless of whether then applicable) as of the most recent Calculation Date;
(n) payments with respect to any Qualified Contingent Obligations, so long as, at the time such Qualified Contingent Obligation was incurred or, if earlier, the agreement to incur such Qualified Contingent Obligations was entered into, such Investment was permitted in part under any combination thereof.this Agreement;
Appears in 1 contract
Samples: Credit Agreement (Boyd Gaming Corp)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];Investments to effect the Transactions; (b)
(i) Investments (x) by the Borrower or any Subsidiary in the Equity Interests of any Subsidiary as of the Closing Date and, to the extent, individually, in excess of $75.0 million, set forth on Part A of Schedule 6.04 and (y) by the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result consisting of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any SubsidiarySubsidiary as of the Closing Date and, to the extent, individually, in excess of $75.0 million, set forth on Part B of Schedule 6.04; and provided, that
(iiiii) Guarantees to the extent (x) any intercompany loan permitted by the foregoing clause (i) that is owing by a non-Guarantor Subsidiary to the Borrower or any Guarantor (or any additional Investments made by the Borrower or any Guarantor pursuant to this proviso) is repaid after the Closing Date or (y) the Borrower or any Guarantor receives, after the Closing Date, any dividend, distribution, interest payment, return of capital, repayment or other cash amount in respect of any Investment in the Equity Interests of any non-Guarantor Subsidiary permitted by the foregoing clause (i) (a “Return of Indebtedness otherwise Equity”), the Borrower or any Subsidiary may make additional Investments in any non- Guarantor Subsidiary in an aggregate amount up to the amount actually received by the Borrower or any Guarantor after the Closing Date as payment in respect of such Investments; provided further that in no event will the aggregate amount of additional Investments made by the Borrower or any Guarantor in non-Guarantor Subsidiaries pursuant to this clause (ii) exceed the sum of the original principal amount of the intercompany loans permitted hereunder by the foregoing clause (i) on the Closing Date and the aggregate amount of Returns of Equity;
(iii) Investments in the Borrower or any Subsidiary; provided that, as at that any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt Investment by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) Guarantor in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed Party pursuant to this clause (riii) shall not in exceed, when taken together with the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate other outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed clause (iii), the greater of $40,000,000 175.0 million and 0.40 times the 43.75% of Adjusted Consolidated EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(ccand
(iv) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted Investments by the proviso thereto Borrower or any Guarantor in the case of any Subsidiary that is not a Loan PartyParty consisting solely of (x) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time contribution or other Disposition of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case Equity Interests or Indebtedness of any other Subsidiary that is not a Loan PartyParty held directly by the Borrower or such Guarantor in exchange for Indebtedness, Equity Interests (or additional share premium or paid in capital in respect of Equity Interests) and not in reliance on this Section 6.04(ee);
or a combination thereof of the Subsidiary to which such contribution or other Disposition is made or (ffy) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event an exchange of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise Equity Interests of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction Subsidiary that is not a Loan Party for Indebtedness of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related SectionSubsidiary; provided, that immediately following the amount consummation of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any an Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any this clause set forth above. The amount of any Investment made other than in (iv), the form of cash Subsidiary whose Equity Interests or cash equivalents shall be Indebtedness are the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time subject of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.remains a Subsidiary;
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make capital contributions or any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) ), shall not exceed the sum of (X) the greater of $15,000,0005,000,000 and 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) with respect to any Investment made pursuant to clause (X), an amount equal to any returns of capital actually received in respect of any such Investment pursuant to clause (X) (not exceeding the amount of the original investment), it being understood and agreed that clause (Y) replenishes clause (X) and shall not create additional Investment capacity beyond the amount available under clause (X);
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $10,000,000, 5,000,000 and 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (j), (g), (o), (r), (s), (ee) and (ll);
(ji) during the Transition Period, other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $50,000,000, and (ii) from and after the greater end of $50,000,000 the Transition Period, other Investments by the Borrower or any Subsidiary so long as, immediately prior to, and 0.50 times pro forma for such Investment and any relayed transactions, the EBITDA Net Secured Leverage Ratio calculated on a Pro Forma Basis for the then most recently ended Test PeriodPeriod shall not exceed 3.75 to 1.00; provided that (A) if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but thereafter, pursuant to a separate and unrelated transaction, becomes a Subsidiary thereafterpursuant to an acquisition permitted under Section 6.04(k), then such Investment may, at the option of the Primary Borrower, upon such person becoming a Subsidiary and for so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Subsidiary Loan Party) and not in reliance on this Section 6.04(j), provided that, any Investment so deemed shall not replenish or otherwise increase the capacity available pursuant to Section 6.04(k) and (B) immediately prior to, and after giving effect to such Investment, no Default or Event of Default shall have occurred or be continuing or would result therefrom;
(k) Investments constituting Permitted Business Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite downs or write offs thereof) not to exceed the greater of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,00020,000,000 and 0.066 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Primary Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Primary Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Primary Borrower, so long as no cash is actually advanced by the any Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Primary Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied[reserved];
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Primary Borrower, if the Primary Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06 in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under under, and subject to, the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings[reserved];
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice[reserved];
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved];Investments received substantially contemporaneously in exchange for Equity Interests of the Primary Borrower; and
(cc) Investments in joint ventures; provided that (i) the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent changes in valuewrite-downs or write-offs thereof) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the sum of (X) the greater of $40,000,000 5,000,000 and 0.40 0.0165 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; providedPeriod plus (Y) with respect to any Investment made pursuant to clause (X), an amount equal to any returns of capital actually received in respect of any such Investment pursuant to clause (X) (not exceeding the amount of the original investment), it being understood and agreed that clause (Y) replenishes clause (X) and shall not create additional Investment capacity beyond the amount available under clause (X), and (ii) if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but thereafter, pursuant to a separate and unrelated transaction, becomes a Subsidiary thereafterpursuant to an acquisition permitted under Section 6.04(k), then such Investment may, at the option of the Primary Borrower, upon such person becoming a Subsidiary and for so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Subsidiary Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments; provided that, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was so deemed shall not a Subsidiary on replenish or otherwise increase the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made capacity available pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee6.04(k);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the a Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents Permitted Investments shall be the fair market value thereof, which shall be thereof (as determined by the Primary Borrower in good faith by the Borrower and may be determined either, at the option of the Borrower, faith) valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change write-downs or write-offs thereof. Notwithstanding anything herein to the contrary, prior to the date that the MUFG facility has been paid in value. The full and Redbox Entertainment and its Subsidiaries shall have become Guarantors and Subsidiary Loan parties hereunder and taken the actions with respect there under Section 5.10, (A) (i) the aggregate outstanding amount of any Investment outstanding at any time Investments made pursuant to this Section 6.04 in (x) non-Loan Party Subsidiaries (other than Redbox Entertainment, which shall be subject to the original cost limitations set forth in clauses (i)(y) and (i)(z), as applicable) shall not exceed $5,000,000 and (y) for so long as Redbox Entertainment is a Loan Party, Redbox Entertainment shall not exceed $20,000,000, (ii) the aggregate outstanding amount of such Investments in joint ventures made pursuant to this Section 6.04 shall not exceed $5,000,000 and (iii) all Investments made in (x) non-Loan Party Subsidiaries and joint ventures and (y) Redbox Entertainment (other than those intellectual property and film assets set forth on Schedule 1.01(D)) shall, in each case, consist of cash and/or Permitted Investments (provided that it is understood that any non-exclusive license of Intellectual Property not prohibited pursuant to Section 5.01(d) shall not constitute an Investment, reduced by any returns ) and (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income B) Redbox Entertainment and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need its Subsidiaries shall not be permitted solely by reference to one category of permitted make any Investments in any Affiliate thereof (other than the Borrower or any portion Subsidiary thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof).
Appears in 1 contract
Samples: Credit Agreement (Chicken Soup for the Soul Entertainment, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Wholly-Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “"Investment”"), except:
(a) [reserved]Investments to effect the Transactions;
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,00025,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityBorrower;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 of the Effective Date Certificate and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (llii);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of (x) $50,000,000 500,000,000 and 0.50 times the EBITDA calculated on a (y) 5.5% of Pro Forma Basis for LTM EBITDA (measured at the then most recently ended Test Periodtime of the making of any such Investment); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger merger, amalgamation or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger merger, amalgamation or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(on) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (b), (e), (f), (g), (h), (i), (j) or (k) of the definition thereof, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qp) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(ur) [reservedReserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xt) Investments by the Borrower and its the Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06(g) in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 6.06(g) for all purposes of this Agreement);
(yu) [Reserved];
(v) Investments consisting of Securitization Assets the licensing or arising as a result contribution of Permitted Securitization FinancingsIntellectual Property pursuant to joint marketing or other similar arrangements with other persons;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aaw) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bbx) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted fixed income or other assets by the proviso thereto in the case of any Subsidiary that is not a Loan Partyso-called "captive" insurance company (each, an "Insurance Subsidiary") and not in reliance on this Section 6.04(cc);consistent with its customary practices of portfolio management; and
(ddy) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable additional Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, at the time any such Investment is made and immediately after giving effect to such Investmentthereto, (i) no Default or Event of Default shall have occurred and is continuing and (ii) the Net Total Leverage Ratio on a Pro Forma Basis would is not exceed 1.75 greater than (A) solely for the benefit of the Term A Facility, the Term A-1 Facility and the Revolving Facility, 4.50 to 1.00; provided that no Event of Default shall have occurred and be continuing;
1.00 (gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b"Pro Rata Only Investment Restriction") or (iiB) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant 5.00 to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment1.00. For purposes of determining compliance with this covenantSection 6.04, (A) an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section Sections 6.04(a) through (hhy) but may be permitted in part under any relevant combination thereof.thereof and
Appears in 1 contract
Samples: Incremental Assumption Agreement (Centurylink, Inc)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person Person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business in connection with the cash management operations of the Company and the Subsidiaries) to or consistent with past practice)Guarantees of the obligations of, or make or permit to exist any investment or any other interest in (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), in any other Person, except:
(a) [reserved];
Investments (including, but not limited to, Investments in Equity Interests, intercompany loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by (i) Investments by the Borrower or any Subsidiary Loan Parties in the Equity Interests of the Borrower Foreign Borrowers or any Subsidiary (or any entity in Subsidiaries that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatare not Loan Parties in an aggregate amount, as at any date of determination, when combined with the aggregate outstanding principal amount of Revolving Facility Loans made to the Foreign Borrowers, not to exceed an amount equal to U.S.$100.0 million (valued at the time of the making thereof, thereof and at the time any Revolving Facility Loans are made to a Foreign Borrower and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) (plus any return of (A) Investments made after the Closing Date capital actually received by the respective investors in respect of investments previously made by them pursuant to this clause a(i)), (ii) Loan Parties pursuant to subclause in Domestic Loan Parties and (iiii) in Subsidiaries that are not Subsidiary Loan Parties in Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;.
(cb) Permitted Investments and Investments investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the Borrower Company or any Subsidiary of non-cash consideration for the Disposition sale of assets permitted under Section 6.05;
(ed) (i) loans and advances to, or Guarantees of Indebtedness of, officers, directors, to employees or consultants of the Borrower Company or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, U.S.$4.0 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fe) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(f) Swap Agreements permitted pursuant to Section 6.13;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, on the Closing Date and set forth on Part I of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount Investments set forth on Part II of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section Schedule 6.04);
(ih) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(ji) other Investments by the Borrower Company or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed U.S.$100.0 million (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 investments theretofore made by it pursuant to this paragraph (i));
(j) Investments constituting Permitted Business Acquisitions in an aggregate amount, which shall be deemed to include the principal amount of Indebtedness that is assumed pursuant to Section 6.01 in connection with such Permitted Business Acquisitions, not to exceed U.S.$125.0 million during any fiscal year of the Company (provided that no such Dollar limitation shall apply so long as, at the time of making any such Investment and 0.50 times after giving effect thereto, (1) no Default or Event of Default has occurred and is continuing or would result therefrom and (2) the EBITDA Leverage Ratio shall be less than 3.00:1.00 calculated on a Pro Forma Basis for pro forma basis as of the then last day of the most recently ended Test Periodfiscal quarter in respect of which financial statements have been delivered pursuant to Section 5.04); provided that if the portion of aggregate consideration for any Permitted Business Acquisition that constitutes an earn out or similar obligation shall not be considered an Investment pursuant to for purposes of this paragraph (j) or Indebtedness for purposes of Section 6.04(j) 6.12 until the fiscal quarter in which the same is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)earned;
(k) additional Investments constituting Permitted Acquisitions so long as immediately after giving effect may be made from time to such Permitted Acquisition, time to the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event extent made with proceeds of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time Equity Interests of the making thereofCompany, and without giving effect which proceeds or Investments in turn are contributed (as common equity) to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Party;
(l) Investments (including, but not limited to, Investments in Equity Interests, intercompany loans between Subsidiaries that are not Loan Parties loans, and Guarantees of Indebtedness otherwise expressly permitted hereunder) after the Closing Date by Subsidiaries that are not Domestic Loan Parties permitted by Section 6.01(m)in any Loan Party or other Subsidiary.
(m) Investments of Receivables Assets in a Special Purpose Receivables Subsidiary arising as a result of Permitted Receivables Financings;
(mn) the Transactions;
(o) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(np) Investments of a Subsidiary acquired after the Closing Date or of a person corporation merged into the Borrower Company or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(pq) Guarantees by the Borrower Company or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrowerbusiness;
(r) Investments a joint venture (including a non-majority owned joint venture) with, or a significant Investment in, a Chinese entity or a project or venture with such Chinese entity (in either case, in an aggregate principal amount not to exceed U.S.$50.0 million) involving a Subsidiary of the Company doing business in China, which venture may result in the Company no longer owning a majority of the Equity Interests of such Subsidiary or the Company or any of its Subsidiaries acquiring an interest in one or more newly formed persons that are received new joint venture entities arising in consideration of the contribution by the Borrower connection with such project or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedventure;
(s) joint ventures (including non-majority owned joint ventures) with, or significant Investments consisting of Restricted Payments permitted under Section 6.06in, entities or projects or ventures with such entities (in either case, in an aggregate principal amount not to exceed U.S.$50.0 million);
(t) Investments to investigate or remedy environmental conditions in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customersotherwise in an aggregate amount not exceeding U.S.$5.0 million and already accrued at March 31, 2010;
(u) [reserved];Loans, capital contributions and other Investments made subsequent to the Closing Date in connection with the Permitted Foreign Restructuring; and
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofCapital expenditures.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the 2015 Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.plus
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person, except:
(a) [reserved]the Transactions;
(b) (i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (iii) ), shall not exceed an aggregate net amount equal to (x) the greater of (1) $15,000,000;100.0 million and (2) 4.50% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04 (plus any return of capital actually received by the respective investors in respect of Investments theretofore made by them pursuant to this paragraph (b)); plus (y) the portion, if any, of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(b)(y), such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied; provided, further, that intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Borrower and the Subsidiaries shall not be included in calculating the limitation in this paragraph at any time.
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,00015.0 million and 2.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such loan or advance for which financial statements have been delivered pursuant to Section 5.04, in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any direct or indirect parent of Holdings) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Swap Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04)Date;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (ok), (r), (s), (ee) and (llu);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed (i) the greater of $50,000,000 100.0 million and 0.50 times 4.50% of Consolidated Total Assets as of the EBITDA calculated on a Pro Forma Basis end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04 (plus any returns of capital actually received by the then most recently ended Test Period; provided that if any Investment respective investor in respect of investments theretofore made by it pursuant to this Section 6.04(jparagraph (j)) is made in any person that was not a Subsidiary plus (ii) the portion, if any, of the Cumulative Credit on the date on which of such Investment was made but becomes election that the Borrower elects to apply to this Section 6.04(j)(ii), such election to be specified in a Subsidiary thereafter, then such Investment may, at the option written notice of a Responsible Officer of the Borrower, upon Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such person becoming a Subsidiary election and the amount thereof elected to be so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)applied;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Foreign Subsidiaries that are not Loan Parties and Guarantees by Foreign Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person an entity merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.046.04 and, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerHoldings (or any direct or indirect parent of Holdings);
(r) Investments in the Equity Interests equity interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary Loan Party of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borroweron an arms’-length basis, so contributed pursuant to this clause paragraph (r) shall not in the aggregate exceed $10,000,000 20.0 million and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefromcontinuing, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause paragraph (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments the redemption, purchase, repurchase or retirement of any Equity Interests permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customerscustomers consistent with past practices;
(u) [reserved]Investments in Foreign Subsidiaries not to exceed the greater of $20.0 million and 2.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04, in the aggregate, as valued at the fair market value of such Investment at the time such Investment is made;
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment dividend or distribution in such amount (provided, provided that the amount of any such Investment investment shall also be deemed to be a Restricted Payment distribution under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Receivables Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising Investments received substantially contemporaneously in exchange for Equity Interests of any Parent Entity; provided that such Investments are not included in any determination of the ordinary course of business or consistent with past practiceCumulative Credit;
(aa) Investments in joint ventures not in excess of the greater of $20.0 million and 2.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the extent constituting Investmentsdate of such Investment for which financial statements have been delivered pursuant to Section 5.04, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;aggregate; and
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Datebetween Borrower and Covalence Plastics. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, provided that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Wholly-Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,00025,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityBorrower;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Restatement Effective Date and set forth on Schedule 6.04 of the Restatement Effective Date Certificate and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Restatement Effective Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Restatement Effective Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (llii);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of (x) $50,000,000 500,000,000 and 0.50 times the EBITDA calculated on a (y) 5.5% of Pro Forma Basis for LTM EBITDA (measured at the then most recently ended Test Periodtime of the making of any such Investment); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Restatement Effective Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Restatement Effective Date, in each case, (i) to the extent such acquisition, merger merger, amalgamation or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger merger, amalgamation or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(on) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (b), (e), (f), (g), (h), (i), (j) or (k) of the definition thereof, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qp) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(ur) [reservedReserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xt) Investments by the Borrower and its the Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06(g) in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 6.06(g) for all purposes of this Agreement);
(yu) [Reserved];
(v) Investments consisting of Securitization Assets the licensing or arising as a result contribution of Permitted Securitization FinancingsIntellectual Property pursuant to joint marketing or other similar arrangements with other persons;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aaw) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bbx) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted fixed income or other assets by the proviso thereto in the case of any Subsidiary that is not a Loan Partyso-called “captive” insurance company (each, an “Insurance Subsidiary”) and not in reliance on this Section 6.04(cc)consistent with its customary practices of portfolio management;
(ddy) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable additional Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, at the time any such Investment is made and immediately after giving effect to such Investmentthereto, (i) no Default or Event of Default shall have occurred and is continuing and (ii) the Net Total Leverage Ratio on a Pro Forma Basis would is not exceed 1.75 greater than (A) solely for the benefit of the Term A Facility, the Term A-1 Facility and the Revolving Facility, 4.75 to 1.00 (the “Pro Rata Only Investment Restriction”) or (B) 5.00 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhz) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations Qualified Receivable Facility permitted under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment6.01(aa). For purposes of determining compliance with this covenantSection 6.04, (A) an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section Sections 6.04(a) through (hhy) but may be permitted in part under any relevant combination thereof and (B) in the event that an Investment (or any portion thereof) meets the criteria of one or more of the categories of permitted Investments (or any portion thereof) described in Sections 6.04(a) through (y), the Borrower may, in its sole discretion, classify or divide such Investment (or any portion thereof) in any manner that complies with this Section 6.04 and will be entitled to only include the amount and type of such Investment (or any portion thereof) in one or more (as relevant) of the above clauses (or any portion thereof) and such Investment (or any portion thereof) shall be treated as having been made or existing pursuant to only such clause or clauses (or any portion thereof); provided, that all Investments described in Schedule 6.04 of the Restatement Effective Date Certificate shall be deemed outstanding under Section 6.04(h). The amount of any Investment made other than in the form of cash, Permitted Investments or other cash equivalents shall be the Fair Market Value thereof valued at the time of the making thereof, and without giving effect to any subsequent write-downs or write-offs thereof.
Appears in 1 contract
Samples: Credit Agreement (Centurylink, Inc)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger or amalgamation with a person Person that is not a Wholly Owned Relevant Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting management operations of the Borrower and the Subsidiaries and (BLoan Parties, which cash management operations shall not extend to any other Person) intercompany loans, advances to or Indebtedness having a term not exceeding 364 days (inclusive Guarantees of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)obligations of, or make any investment (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), in any other Person, except:
(a) [reserved];
Investments (i) including, but not limited to, Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) Interests, intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; loans, and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuehereunder) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) Loan Parties in other Loan Parties, (ii) by Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to in other Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause and (ii), plus (Ciii) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000in Loan Parties;
(cb) Permitted Investments and Investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash its Relevant Subsidiaries of noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(ed) (i) loans and advances to, or Guarantees of Indebtedness of, officers, directors, to employees or consultants of the Borrower or Borrower, any Subsidiary (i) of its Relevant Subsidiaries or, to the extent such employees are providing services rendered on behalf of the Loan Parties, the Parent Company in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,000, 10.0 million and 0.25% of Consolidated Net Tangible Assets (as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04) in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees of the Borrower, any of its Relevant Subsidiaries or, to the extent such employees are providing services on behalf of the Loan Parties, the Parent Company in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fe) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(f) Swap Agreements permitted pursuant to Section 6.13;
(g) Hedging Agreements entered into for non-speculative purposes (i) Investments existing on the Closing Date and/or Investments contemplated as of the Closing Date and Permitted Call Spread Agreementsin each case, set forth on Schedule 6.04(g);
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections referred to in Section 6.02(f), (g), (o), (r), (s), (ee) and (llSection 6.02(g);
(ji) so long as immediately before and after giving effect to such Investment no Default or Event of Default has occurred and is continuing, other Investments by the Borrower or any Subsidiary of its Relevant Subsidiaries in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater of $50,000,000 50.0 million and 0.50 times 5.0% of Consolidated Net Tangible Assets as of the EBITDA calculated on a Pro Forma Basis end of the fiscal quarter immediately prior to the date of such Investments for which financial statements have been delivered pursuant to Section 5.04 (plus any returns of capital actually received by the then most recently ended Test Period; provided that if any Investment respective investor in respect of investments theretofore made by it pursuant to this Section 6.04(j6.04(i));
(j) is made Investments constituting Permitted Business Acquisitions, so long as any Person acquired in any person that was not a Subsidiary on the date on which connection with such Investment was made but Permitted Business Acquisitions and each of such Person’s Subsidiaries becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (Loan Party to the extent permitted required by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)5.10;
(k) additional Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event extent (i) made with proceeds of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time Equity Interests of the making Borrower (or paid for with Equity Interests of a direct or indirect parent of the Borrower) or (ii) in an amount not exceeding the amount of cash contributed as common equity to the Borrower by any direct or indirect parent entity thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m)the Transactions;
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger or amalgamation with a person that is not a Wholly Owned Subsidiary immediately prior to such mergermerger or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person (including, for the avoidance of doubt, any Unrestricted Subsidiary), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(cb) Permitted Investments and Investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition sale of assets permitted under Section 6.059.04 [Mergers, Amalgamations, Consolidations, Sales of Assets and Acquisitions];
(ed) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate amount at any time outstanding amount not to exceed (valued calculated without regard to write-downs or write-offs thereof) $5.0 million (calculated at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000incurrence), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower or such Subsidiary in cash as common equity;
(fe) accounts receivableAccounts, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(f) Swap Agreements (excluding any Swap Agreement entered into for speculative purposes, which, for the avoidance of doubt, shall not be permitted);
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 6.03 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (hg) (calculated without regard to write-downs or write-offs) is not increased at any time above the amount of such Investment Investments existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Date);
(ih) Investments resulting from pledges and deposits under Sections 6.02(f9.02(e) [Liens], (f), (g), (o), (r), (s), (ee) and (llh);
(ji) Investments constituting Permitted Business Acquisitions;
(i) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount the Equity Interests of any Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided, that the sum of (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed made after the greater of $50,000,000 and 0.50 times Closing Date by the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment Loan Parties pursuant to this Section 6.04(jclause (i) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties, plus (B) the net amount outstanding in respect of intercompany loans made after the Closing Date by Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between to Subsidiaries that are not Loan Parties and pursuant to clause (ii), plus (C) the aggregate outstanding amount of Guarantees of Indebtedness after the Closing Date by Loan Parties of Subsidiaries that are not Loan Parties permitted pursuant to clause (iii) (together with any Guarantees of Indebtedness set forth on Schedule 6.03) shall not exceed $5.0 million (plus any return of capital actually received by Section 6.01(mthe respective investors in respect of such Investments theretofore made by them pursuant to this paragraph (j));
(mk) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a any Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries such Subsidiary, as applicable, with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nl) Investments of a Subsidiary that is acquired after the Closing Date or of a person an entity merged into or amalgamated or consolidated with the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent the acquisition of such acquisitionSubsidiary or such merger, merger amalgamation or consolidation consolidation, as applicable, is permitted under this Section 6.049.03 [Investments, (ii) Loans and Advances] and, in the case of any acquisitionmerger, merger amalgamation or consolidation, in accordance with permitted under Section 6.05 9.04 [Mergers, Amalgamations, Consolidations, Sales of Assets and Acquisitions] and (iiiii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(om) acquisitions by the Borrower any Loan Party of obligations of one or more officers or other employees of the Borrower Borrower, any Parent Entity, such Loan Party or its Subsidiaries subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerBorrower or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(pn) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qo) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerBorrower or any Parent Entity;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(sp) Investments consisting of Restricted Payments the redemption, purchase, repurchase or retirement of any Equity Interests permitted under Section 6.069.05 [Dividends and Distributions];
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code UCC Article 3 endorsements for collection or deposit and Uniform Commercial Code UCC Article 4 customary trade arrangements with customerscustomers consistent with past practices;
(u) [reserved];
(vr) Guarantees permitted under Section 6.01 9.01 [Indebtedness] (except to the extent such Guarantee is expressly subject to this Section 6.049.03 [Investments, Loans and Advances]);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such any Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aat) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase advances in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties transfer pricing and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns cost-sharing arrangements (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.i.
Appears in 1 contract
Samples: Revolving Credit Facility (Meridian Bioscience Inc)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that (x) during the period commencing on the Amendment No. 2 Effective Date and ending on the last day of the Covenant Adjustment Period, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of new Investments made by the Borrower or any Subsidiary shall not exceed $10,000,000 and (y) if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that (x) the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test PeriodPeriod and (y) the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments in joint ventures made during the period commencing on the Amendment No. 2 Effective Date and ending on the last day of the Covenant Adjustment Period shall not exceed $5,000,000; provided, that that, if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. .; The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Cerence Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Wholly-Owned Subsidiary immediately prior to such merger, consolidation or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than loans or advances in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting management operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at any date of determination, the aggregate outstanding amount of (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Effective Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Effective Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Effective Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) ), shall not exceed the sum of (X) the greater of (1) $15,000,00055,000,000 and (2) 5.0% of Consolidated Total Assets as at the end of the fiscal quarter ended immediately prior to the date of such Investment for which financial statements have been (or were required to be) delivered pursuant to Section 5.04(a) or 5.04(b) plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Holdings, Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000business, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings or any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Swap Agreements that are not entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Effective Date and set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause paragraph (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Effective Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Effective Date);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (rp), (s), (eet), (ff) and (llkk);
(j) [reserved];
(k) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) 15.0% of Consolidated Total Assets as of the end of the fiscal quarter ended immediately prior to the date of such Investment for which financial statements have been (or were required to be) delivered pursuant to Section 5.04(a) or 5.04(b) plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (X); provided, that if any Investment pursuant to this Section 6.04(k) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto, in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(k);
(l) Investments constituting Permitted Business Acquisitions;
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Effective Date or of an entity merged into the Borrower or merged into or consolidated with a Subsidiary after the Effective Date, in each case, (i) to the extent such acquisition, merger or consolidation was or is permitted under this Section 6.04 or Section 6.05 and (ii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger, consolidation or amalgamation and were in existence on the date of such acquisition, merger, consolidation or amalgamation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of Holdings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower, Holdings or any Parent Entity;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $15,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted by Section 6.06;
(t) Investments in the ordinary course of business consisting of UCC Article 3 endorsements for collection or deposit and UCC Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans and advances to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate paragraph of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of the licensing or contribution of Intellectual Property pursuant to joint marketing arrangements with other persons;
(z) purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of intellectual property in each case in the ordinary course of business, to the extent such purchases and acquisitions constitute Investments;
(aa) Investments received substantially contemporaneously in exchange for Qualified Equity Interests of Holdings or any Parent Entity;
(bb) Investments in joint ventures in an aggregate amount not to exceed the sum of (X) the greater of $50,000,000 35,000,000 and 0.50 times 3.0% of Consolidated Total Assets as of the EBITDA calculated end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been (or were required to be) delivered pursuant to Section 5.04(a) or 5.04(b), plus (Y) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on a Pro Forma Basis for sale, repayments, income and similar amounts) actually received by the then most recently ended Test Periodrespective investor in respect of investments theretofore made by it pursuant to this Section 6.04(bb); provided that if any Investment pursuant to this Section 6.04(j6.04(bb) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j6.04(bb);; and
(kcc) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the in any Unrestricted Subsidiaries in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite downs or write offs thereof) not to exceed the sum of Permitted Acquisitions (X) the greater of Subsidiaries that are not Subsidiary Loan Parties or $35,000,000 and 3.0% of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with Consolidated Total Assets as at the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any end of the Subsidiaries with respect fiscal quarter ended immediately prior to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisitionInvestment for which financial statements have been (or were required to be) delivered pursuant to Section 5.04(a) or 5.04(b) plus (Y) an amount equal to any returns (including dividends, merger or consolidation;
(ointerest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries actually received in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition respect of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test PeriodInvestment; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j6.04(k) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be thereof (as determined in good faith by the Borrower and may be determined either, at the option of the Borrower, in good faith) valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (write-downs or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination write-offs thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Wholly-Owned Subsidiary immediately prior to such merger, consolidation or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person, except:
(a) [reserved]Investments in connection with the Transactions and the Second Amendment Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of in the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, in each case, so long as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without after giving effect to any subsequent change such Investment, intercompany loan or Guarantee, the Borrower shall be in valuecompliance with the Guarantor Coverage Test on a Pro Forma Basis; provided, that intercompany loans made under this clause (b) of (A) Investments made after the Closing Date by the any Loan Parties pursuant Party to subclause (i) in any Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries and that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by organized under the Loan Parties laws of Indebtedness after the Closing Date State of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) Israel shall not exceed (x) $15,000,00025.0 million plus (y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,00025.0 million and 0.03 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of in the Borrower or any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Swap Agreements that are not entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of or contemplated as of, the Closing ClosingSecond Amendment Effective Date (provided, that any such Investment that is (x) not intercompany Indebtedness, (y) not an Operations Services Agreement and (z) in excess of $15.0 million individually shall be set forth on Schedule 6.04 6.04) and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing ClosingSecond Amendment Effective Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04ClosingSecond Amendment Effective Date);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (k), (o), (p), (r), (s), (ee) and (llv);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisitionff), merger or consolidation is permitted under this Section 6.04(gg), (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to pp)(to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04foregoing clauses);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Incremental Assumption Agreement and Second Amendment to Credit Agreement (Playtika Holding Corp.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of of, or any capital contribution in or to, any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments to effect the Transactions;
(b) (i) Investments (x) by the Parent, any Borrower or any Subsidiary in the Equity Interests of any Subsidiary as of the Closing Date and set forth on Part A of Schedule 6.04 and (y) by the Parent, any Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result consisting of such Investment); (ii) intercompany loans from the Parent, any Borrower or any Subsidiary to the Borrower or Parent, any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder as of the Closing Date and set forth on Part B of Schedule 6.04; provided that to the extent any such intercompany loan that is owing by a non-Subsidiary Loan Party to the Parent, any Borrower or any SubsidiarySubsidiary Loan Party (the “Scheduled Loans”) (or any additional Investments made by the Parent, any Borrower or any Subsidiary Loan Party pursuant to this proviso) is repaid after the Closing Date or the Parent, any Borrower or any Subsidiary Loan Party receives, after the Closing Date, any dividend, distribution, interest payment, return of capital, repayment or other amount in respect of any scheduled Investment in the Equity Interests of any non-Subsidiary Loan Party (a “Return of Scheduled Equity”), then additional Investments may be made by the Parent, any Borrower or any Subsidiary Loan Party in any non-Subsidiary Loan Party in an aggregate amount up to the amount actually received by the Parent, any Borrower or any Subsidiary Loan Party after the Closing Date as payment in respect of such Investments; provided further that in no event will the aggregate amount of additional Investments made by the Parent, any Borrower or any Subsidiary Loan Party in non-Subsidiary Loan Parties pursuant to this proviso exceed the sum of the original principal amount of the Scheduled Loans on the Closing Date and the aggregate amount of Returns of Scheduled Equity; (ii) Investments in the Parent, any Borrower or any Subsidiary Loan Party; provided that, as at subject to Schedule 5.12, all amounts owing by the Borrowers or any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect Guarantor to any subsequent change Subsidiary that is not a Guarantor in valuerespect of such Investments shall be subordinated in right of payment to the Obligations pursuant to a subordination agreement substantially in the form of Exhibit F hereto or otherwise reasonably satisfactory to the Administrative Agent and a Borrower; (iii) of Investments by any Subsidiary that is not a Borrower or Guarantor in any Subsidiary that is not a Borrower or Guarantor; (Aiv) Investments by the Parent, any Borrower or any Subsidiary Loan Party in any Subsidiary that is not a Borrower or Guarantor in an aggregate amount for all such outstanding Investments made after the Closing Date not to exceed $250,000,000 (net of any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the any Loan Parties Party (whether or not such Loan Party made such Investment) in connection with any such Investment pursuant to subclause clause (iiv) (excluding any returns in excess of the amount originally invested)); provided that any such Investments shall (I) comprise intercompany transactions undertaken in good faith (as certified by a Responsible Officer of a Borrower) for the purpose of (x) facilitating ordinary course of business intercompany cash management of the Parent and its Subsidiaries, (y) properly capitalizing one or more Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside Borrowers or Guarantors either in connection with the Transactions or in the ordinary course of business after or (z) improving the Closing Date by consolidated tax or operational efficiency of the Loan Parties Parent and its Subsidiaries, in each case, not for the purpose of circumventing any covenant set forth herein and not to facilitate an external financing or exchange transaction and (II) be made solely in the form of cash, notes, receivables, payables or securities; (v) other intercompany liabilities amongst the Borrowers and the Guarantors incurred in the ordinary course of business; (vi) other intercompany liabilities amongst Subsidiaries that are not Guarantors incurred in the ordinary course of business in connection with the cash management operations of such Subsidiaries; and (vii) Investments by the Parent or any Subsidiary Loan Parties Party in any Subsidiary that is not a Loan Party consisting solely of (x) the contribution or other Disposition of Equity Interests or Indebtedness of any other Subsidiary that is not a Loan Party held directly by the Parent or such Subsidiary Loan Party in exchange for Indebtedness, Equity Interests (or additional share premium or paid in capital in respect of Equity Interests) or a combination thereof of the Subsidiary to which such contribution or other Disposition is made or (y) an exchange of Equity Interests of any other Subsidiary that is not a Loan Party for Indebtedness of such Subsidiary; provided that immediately following the consummation of an Investment pursuant to subclause preceding clause (iix) or (y), plus (C) outstanding Guarantees by the Loan Parties Subsidiary whose Equity Interests or Indebtedness are the subject of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000such Investment remains a Subsidiary;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Parent, any Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Parent, any Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Parent solely to the extent that the amount of such loans and advances shall be contributed to the Borrower Parent in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Part C of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits and other Liens under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (lljj);
(j) other Investments by the Borrower Parent or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the greater sum of (X) $50,000,000 100,000,000, plus (Y) so long as (1) no Default or Event of Default shall have occurred and 0.50 times be continuing and (2) the EBITDA calculated Total Net Leverage Ratio on a Pro Forma Basis for is not greater than 2.25 to 1.00, and taking into account any Restricted Payments made pursuant to Section 6.06(d) utilizing the then most recently ended Test PeriodAvailable Amount, any portion of the Available Amount on the date of such election that a Borrower elects to apply to this Section 6.04(j)(Y) in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Available Amount immediately prior to such election and the amount thereof elected to be so applied, plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the a Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the that no more than $25,000,000 in aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of Investments made in reliance on this clause (j) shall be made in non-Loan Party Subsidiaries or Unrestricted Subsidiaries (including Investments arising as a result of the designation of a Subsidiary as an Unrestricted Subsidiary equal to the Fair Market Value of the Parent’s (or its Subsidiaries’) Investments in such Subsidiary at the date of designation);
(k) Investments constituting Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower Parent or a Subsidiary as a result of a foreclosure by the Borrower Parent or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Mallinckrodt PLC)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person (other than in respect interest in, or the acquisition of all or any substantial part of the assets of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other Person, except:
(a) [reserved]Investments made pursuant to the Transactions;
(b) Investments consisting of:
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); Subsidiary;
(ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and and
(iii) Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, that the aggregate outstanding amount sum of
(A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus plus
(B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the from Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (ii), plus plus
(C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (iii) ), shall not exceed an aggregate net amount equal to (x) an amount not to exceed the greater of $15,000,000250.0 million and 65% of EBITDA as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, plus (y) any return of capital (to the extent received by the Borrower or a Subsidiary Loan Party in cash) in respect of Investments made pursuant to this paragraph (b); plus (z) the portion, if any, of the Available Basket Amount on the date of such election that the Borrower elects to apply to this Section 6.04(b)(z);
(c) Permitted Investments and Investments, or any Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.056.05 or Section 6.10;
(e) (i) loans and advances to, or Guarantees of Indebtedness of, officers, directors, to employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, 2.5 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Swap Agreements not entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as to the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04)Disclosure Letter;
(i) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) since the Closing Date not to exceed (i) the greater of $50,000,000 540.0 million and 0.50 times 140% of EBITDA as of the EBITDA calculated end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, plus (ii) any returns of capital actually received by the respective investor in respect of investments theretofore made by it pursuant to this paragraph (j), plus (iii) the portion, if any, of the Available Basket Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(iii) (provided that, if such Investment is not a Domestic Investment, as of the last day of the immediately preceding Test Period, the Borrower shall have been in compliance with the Incurrence Test (on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(jBasis));
(k) Investments, including Investments in Subsidiaries, constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change or in value) contemplation of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m6.01(l);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person corporation merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries any Subsidiary in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash or other property is (or will be or is committed to be) actually advanced by the Borrower or such Subsidiary to any of the Subsidiaries to such officers or employees Person in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any such Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with using Equity Interests of the Borrower;
(r) Investments made in any Foreign Subsidiary in the Equity Interests ordinary course of one or more newly formed persons that are received business and in consideration a manner reasonably consistent with past practice of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Other Investments, including Investments consisting in Unrestricted Subsidiaries and Investments in joint ventures, not to exceed the greater of Restricted Payments permitted under Section 6.06$250.0 million and 65% of EBITDA at any time;
(t) Investments in connection with transactions relating to tax planning strategies of the ordinary course Borrower and its Subsidiaries; provided that all such transactions are between or among Subsidiaries, the Borrower and any trustee, transfer agent or escrow agent relating to such tax planning strategies, or any combination of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customersthe foregoing parties;
(u) [reserved];any Investments in connection with the Transcription Services Sale; provided that, to the extent the Transcription Services Sale is not consummated on or prior to June 30, 2021, Transcription Services shall be required, within 20 Business Days after June 30, 2021 (or such longer period as the Administrative Agent shall agree in its sole discretion), to cause the Collateral and Guarantee Requirement to be satisfied with respect to Transcription Services and with respect to any Equity Interest in or Indebtedness of Transcription Services owned by or on behalf of any Loan Party; and
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms no Event of the Borrower Default under Section 7.01(b), (c), (h) or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cci) shall not exceed the greater of $40,000,000 have occurred and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; providedbe continuing, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and other Investments so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Consolidated Leverage Ratio on a Pro Forma Basis would not exceed 1.75 be less than or equal to 4.25 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Revolving Credit Agreement (Nuance Communications, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practiceindustry practices), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, that as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) (excluding for purposes of the calculation in this proviso any Investment made at a time when, immediately after giving effect thereto, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 2.72 to 1.00, which Investment shall be permitted under this Section 6.04(b) without regard to such calculation), shall not exceed the sum of (X) the greater of $15,000,00040,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment; provided, that on or after the Extension Effective Date, no Additional Investments shall be permitted under this clause (b) solely with respect to Additional Investments that are made out of the ordinary course of business by Loan Parties in domestic Subsidiaries that are not Loan Parties in an aggregate amount in excess of (x) prior to the Reporting Non-Compliance Date, $3,000,000 or (y) on or after the Reporting Non-Compliance Date, $0.00;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition of assets permitted under Section 6.05;
(ei) prior to the Extension Effective Date, loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of Holdings, the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice not to exceed $20,000,000 in an the aggregate at any time outstanding amount (valued at the time of the making thereof, and calculated without giving effect regard to any subsequent change in value) not to exceed $10,000,000), (ii) in respect advances of payroll payments and expenses in the ordinary course of payments, business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred expenses and expenses to employees in the ordinary course of business or consistent with past practice and (iviii) in connection with such person’s purchase of Equity Interests of Holdings, the Borrower or any Parent Entity solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fi) accounts receivable, security deposits and prepayments arising arising, and trade credit granted granted, in the ordinary course of business or consistent with past practice and business, (ii) any assets or securities received in satisfaction or partial satisfaction thereof of defaulted accounts receivable from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and (iii) any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Swap Agreements;
(h) Investments existing onon the Closing Date, or contractually committed as of, of the Closing Date Date, and set forth on Schedule 6.04 to the Original Credit Agreement and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (rk), (s), (ee) and (llu);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (X) the greater of $50,000,000 100,000,000 and 0.50 0.29 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) any portion of the Available Free Cash Flow Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y), which such election shall be set forth in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Available Free Cash Flow Amount immediately prior to such election and the amount thereof elected to be so applied; provided, that no Event of Default has occurred and is continuing or would result therefrom and after giving effect thereto, and, plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to clause (X); provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided further, that no Event of Default Additional Investments shall have occurred and be continuing; providedpermitted under this clause (j) on or after the Extension Effective Date other than, furtherprior to the Reporting Non-Compliance Date, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the Additional Investments in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee)3,000,000;
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: First Lien Credit Agreement and Security Agreement (Exela Technologies, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans loans, advances or advances capital contribution to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments to effect the Transactions;
(ib) Investments by the Borrower Borrower, any Guarantor (other than Holdings) or any Subsidiary in the Equity Interests of the Borrower or Borrower, any Subsidiary Guarantor (or any entity that will become a Subsidiary as a result of such Investment); (iiother than Holdings) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and provided, that the aggregate amount of Investments made under this clause (iiib) Guarantees by the Borrower or in any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are is not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) a Guarantor shall not exceed the greater of $15,000,00025,000,000 and 30% of Adjusted Consolidated EBITDA for the most recently ended Test Period as of such time;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the any Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,0005,000,000 for the most recently ended Test Period as of such time, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityBorrower;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and (including Cash or Permitted Call Spread Investments pledged pursuant to such Hedge Agreements or otherwise in favor of third party providers of any swaps, derivatives or other hedging arrangements, or counterparties of Hedging Agreements, in the ordinary course of business);
(h) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (on), (q), (r), (s), (eedd) and (lljj);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed at the time made the sum of (X) the greater of $50,000,000 25,000,000 and 0.50 times 30% of Adjusted Consolidated EBITDA for the EBITDA calculated most recently ended Test Period as of such time, plus (Y) any portion of the Available Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y), so long as, solely in the case of amounts applied pursuant to clause (a) of the definition of “Available Amount”, immediately after giving effect thereto (i) no Event of Default shall have occurred and is continuing and (ii) Total Net Leverage Ratio on a Pro Forma Basis for is not greater than 3.00 to 1.00, plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the then most recently ended Test Periodamount originally invested) pursuant to clause (X) above; provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger merger, amalgamation or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger merger, amalgamation or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(on) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the its Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(po) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (b), (e), (f), (g), (h), (i), (j) or (k) of the definition thereof, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(qp) Investments (including for the avoidance of doubt, Permitted Acquisitions) to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower;
(rBorrower(or the proceeds received from the contemporaneous issuance of such Qualified Equity Interests) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or other cash equity contributions made to the applicable Subsidiary equity capital of assets (including Equity Interests and cash) to such person or personsthe Borrower after the Amendment No. 3 Effective Date; provided, that (i) the fair market value issuance of such assets, determined in good faith by Equity Interests and the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer proceeds of the Borrower shall certify, Amendment No. 3 Equity Contribution are not included in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) any determination of the assets so contributed and (z) that Available Amount or the requirements calculation of clause (i) of Contribution Indebtedness or otherwise applied to increase any basket or exception under this proviso remain satisfiedAgreement;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(ur) [reserved];
non-cash Investments made in connection with Tax planning and reorganization activities so long as, after giving effect thereto, the security interest of the Lenders in the Collateral, taken as a whole, is not materially impaired (v) Guarantees permitted under Section 6.01 (except to as determined by the extent such Guarantee is expressly subject to this Section 6.04Borrower in good faith);
(ws) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xt) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other such Subsidiary would otherwise be permitted to make a Restricted Payment in such amount under Section 6.06(g) (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 6.06(g) for all purposes of this Agreement, to the extent such Investment remains outstanding under this clause (t));
(yu) Investments consisting of Securitization transfers of Permitted Receivables Facility Assets or arising as a result of Permitted Securitization FinancingsQualified Receivables Facilities;
(zv) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits joint marketing or fees, arising in the ordinary course of business or consistent other similar arrangements with past practiceother persons;
(aaw) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bbx) [reserved]Investments, so long as, immediately after giving effect thereto, (i) no Event of Default under Section 7.01(b), (c), (h) or (i) shall have occurred and is continuing and (ii) the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 2.50 to 1.00;
(ccy) Investments in joint ventures; provided that the ventures in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in valuewrite-downs or write-offs thereof) not to exceed at the time made the sum of Investments made after the Closing Date pursuant to this Section 6.04(cc(X) shall not exceed the greater of (i) $40,000,000 17,500,000 and 0.40 times the (ii) 25% of Adjusted Consolidated EBITDA calculated on a Pro Forma Basis for the then most recently ended Test PeriodPeriod as of such time and (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X) above; provided, that if any Investment pursuant to this Section 6.04(cc6.04(y) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(cc6.04(y);
(dd) [reserved];
(eez) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in valuewrite-downs or write-offs thereof) not to exceed at the time made the sum of (X) the greater of (i) $15,000,00025,000,000 and (ii) 30% of Adjusted Consolidated EBITDA for the most recently ended Test Period as of such time and (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X) above; provided, that if any Investment pursuant to this Section 6.04(ee6.04(z) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(ee6.04(z);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhaa) Investments in Similar Businesses not to exceed at the time made the sum of (X) the greater of (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or $25,000,000 and (ii) in satisfaction 30% of obligations under joint venture agreements existing on Adjusted Consolidated EBITDA for the Closing Date. The amount most recently ended Test Period as of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the and (Y) an amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant equal to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes Investment (excluding any returns in excess of determining compliance the amount originally invested) pursuant to clause (X) above; provided, that if any Investment pursuant to this Section 6.04(aa) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the provisions thereof) and not in reliance on this Section 6.04(aa);
(bb) Without duplication of amounts provided for in Section 6.04(t), loans and advances to any Parent Entity in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to such Parent Entity in accordance with this covenantSection 6.06;
(cc) Investments in Rwanda Trading Company SA in an amount not to exceed $10,000,000 in the aggregate;
(dd) Investments consisting of Liens permitted under Section 6.02 and Indebtedness (including guarantees) permitted under Section 6.01, an Investment need not be permitted solely in each case other than by reference to one category Investments permitted under this Section 6.04;
(ee) Intercompany current liabilities owed to Unrestricted Subsidiaries or joint ventures incurred in the ordinary course of permitted Investments business in connection with the cash management operations of the Borrower and its Subsidiaries; and
(ff) customary performance guarantees by the Borrower or any portion thereof) described Loan Party in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.connection with a Permitted Key Account Purchase Program; and
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (X) the greater of $50,000,000 20,000,000 and 0.50 0.20 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and plus (Y) so long as no Event of Default under Section 7.01(b), (c), (h) or (i) shall have occurred and be continuing or would result from such Investment, any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y), which such election shall be set forth in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00Acquisitions; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,00040,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower; provided, that the issuance of such Equity Interests are not included in any determination of the Cumulative Credit;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 1.10 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]Investments made in connection with the Transactions; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b), Section 6.04(j) or Section 6.04(j6.04(k) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, (A) an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) the above clauses but may be permitted in part under any combination thereof and (B) in the event that an Investment (or any portion thereof) meets the criteria of one or more of the categories of permitted Investments (or any portion thereof) described in the above clauses, the Borrower may, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify, such permitted Investment (or any portion thereof) in any manner that complies with this covenant and at the time of division, classification or reclassification will be entitled to only include the amount and type of such Investment (or any portion thereof) in one of the categories of permitted Investments (or any portion thereof) described in the above clauses.
Appears in 1 contract
Samples: Credit Agreement (Cerence Inc.)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Owned Subsidiary Loan Party immediately prior to such merger, consolidation or amalgamation) all or substantially all of the assets of a Person (or any division, any business unit or line of business of a Person), Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person, except:
(a) [reserved];
(i) Investments by the Borrower any Loan Party or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite downs or write offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) above in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii)) above, plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date by the Loan Parties of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) above, shall not exceed exceed, taken together with the amounts of any sales, transfers, leases or other dispositions by a Loan Party to a Subsidiary that is not a Subsidiary Loan Party in reliance on Section 6.05(c), an aggregate outstanding amount at any time of $15,000,00025.0 million and shall only be permitted so long as no Default or Event of Default is continuing or would result therefrom;
(cb) Permitted Investments and Investments that were Permitted Investments when made;
(dc) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition sale of assets to the extent permitted under Section 6.05;
(ed) so long as no Default or Event of Default is continuing or would result therefrom, loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, 15.0 million in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof) and (ii) in respect of payroll payments and or relocation expenses in the ordinary course of business or business, consistent with past practicepractices, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred not to exceed $5.0 million in the ordinary course of business aggregate at any time outstanding (calculated without regard to write downs or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equitywrite offs thereof);
(fe) accounts receivable, security deposits and prepayments arising with customers and trade credit credit, in each case, arising or granted in the ordinary course of business or consistent with past practice business, and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any security deposits, prepayments and other credits to suppliers suppliers, lessors or utilities made in the ordinary course of business or consistent with past practicebusiness;
(f) Hedging Agreements permitted pursuant to Section 6.11;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, on the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements extensions or reinvestments thereof, so long renewals thereof to the extent not involving any additional Investments other than as the aggregate amount result of all Investments the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment Investments as in existence effect on the Closing Date or as otherwise permitted by date of this Section 6.04)Agreement;
(ih) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)Section 6.02;
(ji) so long as no Default or Event of Default is continuing or would result therefrom, other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite downs or write offs thereof) not to exceed the greater sum of (x) $50,000,000 and 0.50 times 27.5 million (plus any returns of capital actually received by the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment respective investor in respect of investments theretofore made by it pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) clause (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ji);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing); provided, further, that, that if the Increased Investment Trigger is satisfied immediately prior to and after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 aggregate amount of Investments permitted pursuant to 1.00this clause (x) shall be $75.0 million plus (y) the portion, the aggregate outstanding amount (valued at the time if any, of the making thereofCumulative Credit on such date that the Borrower elects to apply to this Section 6.04(i), such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and without giving effect the amount thereof elected to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000be so applied;
(lj) Investments constituting Permitted Business Acquisitions;
(k) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m6.01(l);
(ml) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person an entity merged into into, or consolidated or amalgamated with the Borrower or merged into or consolidated or amalgamated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidationconsolidation or amalgamation, in accordance with Section 6.05 6.05, and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation or amalgamation and were in existence on the date of such acquisition, merger or consolidation;
consolidation or amalgamation; and, in each case, any Investment held by such Person; provided, that the foregoing is intended solely to grandfather such Investments as are indirectly acquired as a result of an acquisition of a Person otherwise permitted under this clause (om) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries and any consideration paid in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries that may be allocable to such officers Investments that consist of Persons that are not Loan Parties must be permitted by, and be taken into account in computing compliance with, any basket amounts or employees in connection with the limitations applicable to such acquisition of any such obligationshereunder;
(pn) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary Loan Party in the ordinary course of business or consistent with past practicebusiness;
(qo) so long as no Event of Default is continuing or would result therefrom, Investments to the extent that payment for such Investments is made with Equity Interests (other than Disqualified Stock) of Holdings or any Parent Entity; provided that such Investments are not included in any determination of the BorrowerCumulative Credit;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(sp) Investments consisting of Restricted Payments the redemption, purchase, repurchase or retirement of any Equity Interests permitted under Section 6.06;
(tq) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customerscustomers consistent with past practices;
(ur) [reserved]so long as no Default or Event of Default is continuing or would result therefrom, Investments in Subsidiaries that are not Loan Parties after giving effect to the applicable Investments in an aggregate amount (valued at the time of the making thereof and without giving effect to any write-downs or write-offs thereof) outstanding at any time not to exceed $5.0 million;
(vs) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(wt) advances in the form of a prepayment of expensesexpenses in the ordinary course of business, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary, but excluding payments of such expenses that are otherwise prohibited by this Agreement;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(yu) Investments consisting of Securitization Assets the licensing or arising as a result contribution of Permitted Securitization Financings;
(z) loans or advances intellectual property pursuant to members representing their deferred initiation deposits or fees, arising joint marketing arrangements with other persons in the ordinary course of business or consistent with past practicebusiness;
(aav) to the extent constituting Investments, Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property intellectual property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(ggw) [reserved]; and
(hhx) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof[reserved].
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of obligations of, or make or permit to exist any investment or any other person interest in (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), any other person, except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause clause (iii) ), shall not exceed an aggregate net amount equal to (x) the greater of (1) $15,000,000;100 million and (2) 4.5% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04 (plus any return of capital actually received by the respective investors in respect of Investments theretofore made by them pursuant to this paragraph (b)); plus (y) the portion, if any, of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(b)(y), such election to be specified in a written notice of a Responsible Officer of the Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied; provided, further, that intercompany current liabilities incurred in the ordinary course of business in connection with the cash management operations of the Borrower and the Subsidiaries shall not be included in calculating the limitation in this paragraph at any time.
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;; Second Amended and Restated Term Loan Credit Agreement
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,00025 million and 1.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such loan or advance for which financial statements have been delivered pursuant to Section 5.04, in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Swap Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04)Date;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (ok), (r), (s), (ee) and (llu);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed (i) the greater of $50,000,000 225 million and 0.50 times 6.5% of Consolidated Total Assets as of the EBITDA calculated on a Pro Forma Basis end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04 (plus any returns of capital actually received by the then most recently ended Test Period; provided that if any Investment respective investor in respect of investments theretofore made by it pursuant to this Section 6.04(jparagraph (j)) is made in any person that was not a Subsidiary plus (ii) the portion, if any, of the Cumulative Credit on the date on which of such Investment was made but becomes election that the Borrower elects to apply to this Section 6.04(j)(ii), such election to be specified in a Subsidiary thereafter, then such Investment may, at the option written notice of a Responsible Officer of the Borrower, upon Borrower calculating in reasonable detail the amount of Cumulative Credit immediately prior to such person becoming a Subsidiary election and the amount thereof elected to be so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)applied;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Foreign Subsidiaries that are not Loan Parties and Guarantees by Foreign Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, Second Amended and Restated Term Loan Credit Agreement customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person an entity merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.046.04 and, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerHoldings (or any Parent Entity);
(r) Investments in the Equity Interests equity interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borroweron an arms’-length basis, so contributed pursuant to this clause paragraph (r) shall not in the aggregate exceed $10,000,000 30 million and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefromcontinuing, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause paragraph (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments the redemption, purchase, repurchase or retirement of any Equity Interests permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;customers consistent with past practices; Second Amended and Restated Term Loan Credit Agreement
(u) [reserved]Investments in Foreign Subsidiaries not to exceed the greater of $70 million and 2.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04, in the aggregate, as valued at the fair market value of such Investment at the time such Investment is made;
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment dividend or distribution in such amount (provided, provided that the amount of any such Investment investment shall also be deemed to be a Restricted Payment distribution under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Receivables Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising Investments received substantially contemporaneously in exchange for Equity Interests of any Parent Entity; provided that such Investments are not included in any determination of the ordinary course of business or consistent with past practice;Cumulative Credit; and
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time ventures not in excess of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 70 million and 0.40 times 2.0% of Consolidated Total Assets as of the EBITDA calculated on a Pro Forma Basis for end of the then most recently ended Test Period; provided, that if any Investment pursuant fiscal quarter immediately prior to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which of such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to for which financial statements have been made delivered pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto 5.04, in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Dateaggregate. The amount of Investments that may be made at any time pursuant to clause (C) of the proviso in of Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, provided that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Term Loan Credit Agreement (Berry Plastics Holding Corp)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Owned Subsidiary of Holdings immediately prior to such merger, consolidation or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower Holdings, Products and the Subsidiaries and (BSubsidiaries) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments in connection with (i) the Transactions as contemplated by the Tembec Arrangement Agreement as in effect on the Tembec Signing Date or (ii) the Tembec Refinancing Transactions;
(b) (i) Investments by the Borrower Holdings, Products or any Subsidiary other Loan Party in the Equity Interests of the Borrower Holdings, Products or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)other Loan Party; (ii) intercompany loans from the Borrower Investments by any Subsidiary that is not a Loan Party in Holdings, Products or any Subsidiary other Subsidiary, provided, that any such Investment in the form of a loan, advance or Guarantee of Indebtedness of another person shall be subject to the Borrower or any Subsidiaryproviso in Section 7.01(e); and (iii) Guarantees Investments by the Borrower or any Canadian Loan Party in any Canadian Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change made in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date and not to effect indirectly any Investment by the any Domestic Loan Parties to Subsidiaries that are not Subsidiary Party in any Non-Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Party Foreign Subsidiary;
(c) Investments in (i) Permitted Investments (and Investments that were Permitted Investments when made), and (ii) Investment Grade Securities made prior to the First Amendment Effective Date (and Investments that were Investment Grade Securities when made prior to the First Amendment Effective Date);
(d) Investments arising out of the receipt by the Borrower Holdings or any Subsidiary of non-cash consideration for the Disposition sale, transfer or other disposition of assets permitted under Section 6.057.05 (other than Section 7.05(e));
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower Holdings or any Subsidiary made (i) in the ordinary course of business or consistent with past practice not to exceed $5,000,000 in an the aggregate at any time outstanding amount (valued at the time of the making thereof and calculated without regard to write downs or write offs thereof), and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings or any direct or indirect parent of Holdings solely to the extent that the amount of such loans and advances shall be contributed to the Borrower Holdings in cash as common equityequity not to exceed $5,000,000 in the aggregate at any time outstanding (valued at the time of the making thereof and calculated without regard to write downs or write offs thereof);
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread AgreementsSwap Contracts permitted hereunder;
(h) Investments existing on, or contractually committed as of, the Closing Signing Date and set forth on Schedule 6.04 7.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or contractually committed to on the Closing Signing Date (other than pursuant to an increase except as explicitly required by the terms of any such Investment or contractual commitment as in existence on the Closing Signing Date or as otherwise permitted by this Section 6.04)under the Loan Documents;
(i) Investments resulting from pledges and deposits permitted under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)Section 7.02;
(j) other Investments by the Borrower Holdings or any Subsidiary in an aggregate outstanding amount, when taken together with the aggregate amount of all Investments by or in Foreign Subsidiaries made pursuant to clause (viii)(a) of the definition of “Permitted Business Acquisition” (valued at the time of the making thereof, and without giving effect to any subsequent change write downs or write offs thereof, and with it being understood and agreed that no further Investments in value) the form of Permitted Business Acquisitions shall be permitted to be made at any time on or after the First Amendment Effective Date), not to exceed (i) an aggregate amount equal to the greater sum of (x) $50,000,000 40,000,000 and 0.50 times (y) so long as immediately after giving effect to the EBITDA calculated making of Investments under this Section 7.01(j)
(i) on a Pro Forma Basis for Basis, the then most recently ended Test PeriodTotal Net Senior First Lien Secured Leverage Ratio would not exceed 4.00:1.00, $15,000,000, plus (ii) so long as at the time of the making of such Investment and after giving effect thereto, no Event of Default shall have occurred and be continuing or would result therefrom, the portion, if any, of the Cumulative Credit on the date of such election that Products elects to apply to this Section 7.04(j)(ii); provided that no further Investments shall be permitted to be made under this Section 7.04(j)(ii) at any time on or after the First Amendment Effective Date; provided that if any Investment pursuant to this Section 6.04(j7.04(j) is made in any person that was is not a Subsidiary on Loan Party at the date on which of the making of such Investment was made but and such person becomes a Subsidiary thereafterLoan Party after such date, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, shall thereafter be deemed to have been made pursuant to Section 6.04(b7.04(b) (and shall cease to the extent permitted by the proviso thereto in the case of any Subsidiary that is not have been made pursuant to this Section 7.04(j) for so long as such person continues to be a Loan Party) and not in reliance on this Section 6.04(j)Party or a Domestic Subsidiary of Holdings;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00Business Acquisitions; provided that no Event of Default further Investments shall have occurred be permitted to be made under this Section 7.04(k) from and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000First Amendment Effective Date;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by such Subsidiaries that are not Loan Parties to the extent permitted by Section 6.01(m7.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice suppliers or Investments acquired by the Borrower Holdings or a any Subsidiary as a result of a foreclosure by the Borrower Holdings or any of the its Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Rayonier Advanced Materials Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger merger, consolidation or amalgamation with a person that is not a Wholly Owned Subsidiary of Holdings immediately prior to such merger, consolidation or amalgamation) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower Holdings, Products and the Subsidiaries and (BSubsidiaries) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments in connection with (i) the Transactions as contemplated by the Tembec Arrangement Agreement as in effect on the Tembec Signing Date or (ii) the Tembec Refinancing Transactions;
(i) Investments by the Borrower Holdings, Products or any Domestic Subsidiary in the Equity Interests of the Borrower Holdings, Products or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Domestic Subsidiary; and (ii) intercompany loans from the Borrower or Investments by any Foreign Subsidiary to the Borrower in Holdings, Products or any Subsidiary; and (iii) Guarantees by provided, that any such Investment in the Borrower form of a loan, advance or any Subsidiary Guarantee of Indebtedness otherwise permitted hereunder of another person shall be subject to the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change proviso in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iiSection 7.01(e), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investment Grade Securities and Investments that were Permitted Investments or Investment Grade Securities when made;
(d) Investments arising out of the receipt by the Borrower Holdings or any Subsidiary of non-cash consideration for the Disposition sale, transfer or other disposition of assets permitted under Section 6.057.05 (other than Section 7.05(e));
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower Holdings or any Subsidiary (i) in the ordinary course of business or consistent with past practice not to exceed $30,000,000 in an the aggregate at any time outstanding amount (valued at the time of the making thereof and calculated without regard to write downs or write offs thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practicebusiness, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings or any direct or indirect parent of Holdings solely to the extent that the amount of such loans and advances shall be contributed to the Borrower Holdings in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread AgreementsSwap Contracts permitted hereunder;
(h) Investments existing on, or contractually committed as of, the Closing Signing Date and set forth on Schedule 6.04 7.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or contractually committed to on the Closing Signing Date (other than pursuant to an increase except as explicitly required by the terms of any such Investment or contractual commitment as in existence on the Closing Signing Date or as otherwise permitted by this Section 6.04)under the Loan Documents;
(i) Investments resulting from pledges and deposits permitted under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)Section 7.02;
(j) other Investments by the Borrower Holdings or any Subsidiary in an aggregate outstanding amount, when taken together with the aggregate amount of all Investments by or in Foreign Subsidiaries made pursuant to clause (viii)(a) of the definition of “Permitted Business Acquisition” (valued at the time of the making thereof, and without giving effect to any subsequent change in value) write downs or write offs thereof), not to exceed (i) the greater of $50,000,000 125,000,000 and 0.50 times 5.0% of Consolidated Total Assets as of the EBITDA calculated end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 4.05 or 6.04, as applicable, plus (ii) so long as at the time of the making of such Investment and after giving effect thereto, no Event of Default shall have occurred and be continuing or would result therefrom, the portion, if any, of the Cumulative Credit on a Pro Forma Basis for the then most recently ended Test Perioddate of such election that Products elects to apply to this Section 7.04(j)(ii); provided that if any Investment pursuant to this Section 6.04(j7.04(j) is made in any person that was is not a Domestic Subsidiary on of Holdings at the date on which of the making of such Investment was made but and such person becomes a Domestic Subsidiary thereafterof Holdings after such date, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, shall thereafter be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party7.04(b) and not in reliance on shall cease to have been made pursuant to this Section 6.04(j)7.04(j) for so long as such person continues to be a Domestic Subsidiary of Holdings;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by such Subsidiaries that are not Loan Parties to the extent permitted by Section 6.01(m7.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice suppliers or Investments acquired by the Borrower Holdings or a any Subsidiary as a result of a foreclosure by the Borrower Holdings or any of the its Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Restatement Date or of a person an entity merged into the Borrower Holdings or merged into or consolidated with a Subsidiary after the Closing Restatement Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.047.04 and, (ii) in the case of any acquisition, merger merger, consolidation or consolidationamalgamation, in accordance with Section 6.05 and 7.05 (iiiother than Section 7.05(e)) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, consolidation or consolidation amalgamation and were in existence on the date of such acquisition, merger merger, consolidation or consolidationamalgamation;
(o) acquisitions by the Borrower Holdings or Products of obligations of one or more officers or other employees of Holdings, any direct or indirect parent of Holdings, Products or the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any direct or indirect parent entity of Holdings, so long as no cash is actually advanced by the Borrower Holdings, Products or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower Holdings, Products or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower Holdings, Products or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerHoldings or any direct or indirect parent entity of Holdings;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower Holdings, Products or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value (as determined in good faith by Holdings) of such assets, determined in good faith by the Borroweron an arms’-length basis, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower Holdings shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent certify (x) immediately that after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the BorrowerHoldings) of the assets so contributed and (z) that the requirements of clause paragraph (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.067.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
Investments in Foreign Subsidiaries (vincluding acquisitions by and of Foreign Subsidiaries) Guarantees permitted under Section 6.01 not to exceed, when taken together with the aggregate amount of all Investments by or in Foreign Subsidiaries made pursuant to clause (except to viii)(b) of the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances definition of “Permitted Business Acquisition”, in the form aggregate, the greater of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent 10.0% of Consolidated Total Assets as of the Borrower, if end of the Borrower or any other Subsidiary would otherwise be permitted fiscal quarter immediately prior to make a Restricted Payment in such amount (provided, that the amount date of any such Investment shall also be deemed for which financial statements have been delivered pursuant to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
4.05 or 6.04, as applicable and (y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
$325,000,000 (z) loans or advances plus an amount equal to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by any Loan Party in respect of any Investments made pursuant to this clause (u) (but excluding any such returns in excess of the amount originally invested)), as valued at the fair market value (as determined in good faith by Holdings) of such Investment at the time such Investment is made, so long at the time of the making of such Investment under this clause (u) and after giving effect thereto, no Event of Default shall have occurred and be continuing or would result therefrom;
(v) Investments consisting of the licensing or contribution of intellectual property licenses pursuant to joint marketing arrangements with other persons;
(w) Guarantees permitted under Section 7.01 (except to the extent such Guarantee is expressly subject to this Section 7.04);
(x) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of Holdings or such Subsidiary;
(y) Investments by Holdings and its Subsidiaries, including loans and advances to any direct or indirect parent of Holdings, if Holdings or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 7.06 for all purposes of this Agreement);
(z) Investments in Farm Credit Equities in accordance with the terms of this Agreement;
(aa) Investments arising as a result of Permitted Receivables Financings;
(bb) Investments made substantially contemporaneously in exchange for Equity Interests of Holdings or any direct or indirect parent entity of Holdings; provided, that such Investments are not included in any determination of the Cumulative Credit;
(cc) Investments in joint ventures and Unrestricted Subsidiaries; provided that the aggregate outstanding amount (valued at the time of the making thereof and calculated without regard to write downs or write offs thereof) of Investments made pursuant to this clause (cc) shall not exceed the sum of (i) the greater of $100,000,000 and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 4.05 or 6.04, as applicable, in the aggregate plus (ii) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the respective investors in respect of any such Investments theretofore made by them pursuant to this clause (cc) (excluding any returns in excess of the amount original invested); provided that if any Investment pursuant to this clause (cc) is made in any person that is not a Domestic Subsidiary of Holdings at the date of the making of such Investment and such person becomes a Domestic Subsidiary of Holdings after such date, such Investment shall thereafter be deemed to have been made pursuant to Section 7.04(b) and shall cease to have been made pursuant to this clause (cc) for so long as such person continues to be a Domestic Subsidiary of Holdings;
(dd) additional Investments; provided, that at the time of such Investment and after giving full effect thereto, (A) no Event of Default shall have occurred and be continuing or would result therefrom, (B) (x) during any Collateral Suspension period, the Total Net Leverage Ratio shall not be in excess of 3.50:1.00 on a Pro Forma Basis and (y) at any other time, the Total Net Leverage Ratio shall not be in excess of 4.00:1.00 on a Pro Forma Basis and (C) the Total Net Senior First Lien Secured Leverage Ratio shall not be in excess of 3.00:1.00 on a Pro Forma Basis; provided, that any Investments made in reliance of this Section 7.04(dd) (including any Investments made pursuant to clause (viii)(c) of the definition of “Permitted Business Acquisition”) shall reduce the Cumulative Credit in an amount equal to the amount of such Investment; provided, further, that the Cumulative Credit shall not be reduced below zero as a result thereof;
(ee) Investments consisting of or to finance purchases and acquisitions of inventory, supplies, materials, services or equipment or purchases of contract rights or licenses or leases of intellectual property;
(ff) any Investment in any Subsidiary or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business; and
(gg) Guarantees by Holdings of the obligations outstanding from time to time under (A) the Offre de prêt (Loan Offer) (File D129013) entered into on March 9, 2012, between Investissement Québec, Tembec, Tembec Industries Inc. and Tembec Énergie SEC., as amended, amended and restated, supplemented or otherwise modified from time to time, (B) the Offre de prêt (Loan Offer) (File D135683) entered into on September 6, 2013, between Investissement Québec, Tembec, Tembec Industries Inc. and Tembec Énergie SEC., as amended, amended and restated, supplemented or otherwise modified from time to time and (C) the Amended and Restated Credit Agreement, dated as of September 19, 2013, among Tembec, Tembec Entergy LP and Integrated Private Debt Fund III LP, as administrative agent, as amended, amended and restated, supplemented or otherwise modified from time to time. For purposes of determining compliance with this covenantSection 7.04, an at the option of Products, the date of determination of whether any Investment need not is permitted shall be permitted solely by reference deemed to one category be the date the definitive documentation for such Investment is executed (the “Test Date”), and if, after giving effect to such Investment and the other transactions to be entered into in connection therewith on a Pro Forma Basis as if they had occurred at the beginning of permitted Investments (or any portion thereof) described the most recent Test Period ending prior to such Test Date, Holdings, Products and/or their Subsidiaries, as applicable, could have made such Investment on such Test Date in compliance with this Section 6.04(a) through (hh) but may 7.04, then this Section 7.04 shall be permitted in part under any combination thereofdeemed to have been complied with.
Appears in 1 contract
Samples: Restatement Agreement (Rayonier Advanced Materials Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or payments in respect of any Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed the greater of $15,000,0009,000,000 and 0.15 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,0006,000,000 and 0.10 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 30,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(nm) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, to the extent permitted in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(on) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(o) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed the greater of $10,000,000 6,000,000 and 0.10 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings[reserved];
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 24,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,0009,000,000 and 0.15 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.003.00:1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]Investments made in an aggregate amount not to exceed the aggregate amount of Excluded Contributions; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Open Lending Corp)
Investments, Loans and Advances. (i) Purchase The Credit Parties will not, and will not permit any of the Restricted Subsidiaries to, make, hold or acquire (including pursuant permit to remain outstanding any Investments in or to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)Person, except:
(a) [reserved]Investments existing on the Effective Date set forth on Schedule 9.05;
(ib) Investments by the Borrower or any Subsidiary consisting of extensions of credit in the Equity Interests nature of the Borrower accounts receivable or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans notes receivable arising from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary grant of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) trade credit in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereofbusiness, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss loss;
(c) Investments by the Credit Parties or any Restricted Subsidiary in cash and Cash Equivalents and Investments in assets that were Cash Equivalents when such Investment was made;
(d) Investments (i) the consideration of which consists of Equity Interests (other than Disqualified Capital Stock) of Holdings, or warrants options or other rights to purchase or acquire Equity Interests (other than Disqualified Capital Stock) of Holdings or (ii) in an amount not to exceed Qualifying Net Cash Proceeds; provided that, in the case of clause (ii) above: (A) both immediately before, and immediately after giving effect to, any prepayments such Investment, no Default, Event of Default or Borrowing Base Deficiency has occurred and is continuing or would result therefrom and (B) any such Investment is made within sixty (60) days after the initial receipt by Holdings of such Qualifying Net Cash Proceeds;
(e) Investments (i) made by Holdings in or to the Borrower, (ii) made by the Borrower in or to any other credits Person that, prior to suppliers such Investment, is a Guarantor; (iii) made by Holdings or any Restricted Subsidiary in or to the Borrower or any other Person that, prior to such Investment, is a Guarantor; (iv) made by any Restricted Subsidiary that is not a Guarantor in or to the Borrower, Holdings or any other Restricted Subsidiary; or (v) subject to Section 2.07(f), provided that on a pro forma basis after giving effect to any such Investment, no Borrowing Base Deficiency shall have occurred and be continuing, made by any Credit Party in any Restricted Subsidiary that is not a Subsidiary Guarantor; provided, that (x) any Investment made by any Restricted Subsidiary that is not a Credit Party in any Credit Party pursuant to this Section 9.05(e) shall be subordinated in right of payment to the Loans pursuant to the Subordinated Intercompany Note and (y) the aggregate amount at any time made or outstanding pursuant to this clause (e)(v) shall not exceed $5,000,000;
(f) consideration (other than cash consideration) received by a Credit Party or a Restricted Subsidiary pursuant to a Disposition permitted under Section 9.11, to the extent such consideration is permitted pursuant to Section 9.11;
(g) loans or advances to employees, officers or directors in the ordinary course of business of the Credit Parties or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementsthe Restricted Subsidiaries, in each case only as permitted by applicable law, including Section 402 of the Sarbanes Oxley Act of 2002, but in any event not to exceed $2,500,000 in the aggregate at any time;
(h) Investments existing onin stock, obligations or contractually committed securities received in settlement of debts arising from Investments permitted under this Section 9.05 owing to the Credit Parties or the Restricted Subsidiaries as of, a result of a bankruptcy or other insolvency proceeding of the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount Credit Party in respect of such Investment existing debts or committed on upon the Closing Date (other than pursuant to an increase as required by the terms enforcement of any such Investment Lien in favor of the Credit Parties or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04)Restricted Subsidiaries;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary beginning on the date on which such Investment was the first financial statements have been delivered pursuant to Section 8.01(a), (x) Investments made but becomes a Subsidiary thereafterin connection with the purchase, then such Investment maylease or other acquisition of tangible assets of any Person, at and (y) Investments made in connection with the option purchase, lease or other acquisition of all or substantially all of the Borrowerbusiness of any Person, upon such person becoming a Subsidiary and or all of the Equity Interests of any Person, so long as such person remains Person becomes a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Restricted Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00or any division, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course line of business or consistent with past practice or Investments acquired business unit of any Person (including by the Borrower merger or a Subsidiary as a result consolidation of a foreclosure by such Person into the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
Guarantor); provided that (nA) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated promptly complies with a the requirements of Section 8.14 in connection with any newly acquired Restricted Subsidiary to the extent required thereby and both immediately before and immediately after the Closing Date, in each case, giving effect thereto (B) (i) to the extent such acquisitionno Default, merger Event of Default or consolidation Borrowing Base Deficiency has occurred and is permitted under this Section 6.04, continuing or would result therefrom; (ii) in the case of any acquisitionPro Forma Net Leverage Ratio is equal to or less than 2.252.50 to 1.00, merger or consolidation, in accordance with Section 6.05 and (iii) the Aggregate Revolving Credit Commitment available to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence be borrowed on the date of such acquisition, merger Investment (disregarding for purposes of this clause (B)(iii) the condition set forth in Section 6.02(c)) equals or consolidationexceeds twenty-five percent (25%) of the Aggregate Elected Commitment Amount;
(oj) acquisitions Investments permitted by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligationsSection 9.10;
(pk) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations subject to Section 2.07(f), and provided that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, on a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately pro forma basis after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default Borrowing Base Deficiency shall have occurred and be continuing, other Investments not to exceed in the aggregate at any time outstanding an amount equal to $15,000,000;
(ggl) [reserved]subject to Section 2.07(f), beginning on the date on which the first financial statements have been delivered pursuant to Section 8.01(a), other Investments in an amount not to exceed Available Free Cash Flow, so long as, both immediately before and immediately after giving effect thereto, (x) no Default, Event of Default or Borrowing Base Deficiency has occurred and is continuing or would result therefrom; and (y) the Pro Forma Net Leverage Ratio is equal to or less than 2.252.50 to 1.00, and (z) the Aggregate Revolving Credit Commitment available to be borrowed on the date of such Investment (disregarding for purposes of this clause (z) the condition set forth in Section 6.02(c)) equals or exceeds twenty-five percent (25%) of the Aggregate Elected Commitment Amount;
(m) any guarantee permitted under Section 9.02; and
(hhn) subject to the limits in Section 9.06, Investments made (i) in connection with the exercise direct ownership interests in additional Oil and Gas Properties and gas gathering, processing and transportation systems related thereto or related to farm-out, farm-in, joint operating, joint venture or area of any subscriptionsmutual interest agreements, optionsgathering, warrantsprocessing and transportation systems, calls, puts pipelines or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) similar arrangements which are usual and customary in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to oil and gas exploration and production business located within the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election geographic boundaries of the BorrowerUnited States of America, be increased by the amount of Investments that could be made at such time under the other Related Sectionincluding tribal lands; provided, provided that the amount foregoing Investments shall not include any Investment in the Equity Interests of each such increase in respect of one Related Section a Person. Notwithstanding the foregoing, no Investments shall be treated as having been used under the other Related Section. Any Investment permitted in any person and to Grizzly Oil Sands other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or therein existing as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofEffective Date.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to exist any investment or Guarantees of the Indebtedness of any other person interest in, any other Person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoingeach, an “Investment”), except:
(a) [reserved];
Investments made after the date hereof by: (i) Investments by the Borrower or a US Loan Party in any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)other US Loan Party; (ii) intercompany loans from the Borrower a Canadian Loan Party in any other Canadian Loan Party; or any Subsidiary to the Borrower or any Subsidiary; and (iii) a US Loan Party in a Canadian Loan Party so long as, in the case of this subclause (iii): (A) (1) the aggregate amount of such Investments (together with the aggregate Indebtedness and Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as outstanding pursuant to Section 6.01(k)) shall not exceed at any date time outstanding US$75,000,000 or (2) the amount of determination, any such Investment did not exceed the aggregate outstanding amount (valued Available Amount at the time of the making thereof, and such Investment (in each case determined without giving effect regard to any subsequent change in valuewrite-downs or write-offs) and (B) no Event of Default has occurred and is continuing at the time of such Investment or would result therefrom;
(Ab) Permitted Investments;
(c) Investments made after the Closing Date date hereof by the a Loan Parties pursuant to subclause Party in any Foreign Subsidiary, other Excluded Subsidiary, Unrestricted Subsidiary or in any Intermediate Holding Company which owns directly, or through one or more subsidiaries, a Foreign Subsidiary, other Excluded Subsidiary or Unrestricted Subsidiary (whether consisting of (i) Investments in existing Foreign Subsidiaries, Excluded Subsidiaries, Unrestricted Subsidiaries that are not (or Intermediate Holding Companies) or (ii) the acquisition or formation of any new Foreign Subsidiary, other Excluded Subsidiary Loan Partiesor Unrestricted Subsidiary (or Intermediate Holding Company)), plus so long as: (BA) net (1) the aggregate amount of such Investments (together with the aggregate Indebtedness and Guarantees outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iiSection 6.01(l), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
at any time outstanding US$75,000,000 or (c2) Permitted Investments the amount of any such Investment did not exceed the Available Amount at the time of such Investment (in each case determined without regard to any write-downs or write-offs) and Investments that were Permitted Investments when made(B) no Event of Default has occurred and is continuing at the time of such Investment, or would result therefrom;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments againstwith, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(ne) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, Credit Parties may make loans and advances (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary Loan Parties on an arms-length basis in the ordinary course of business or consistent with past practicepractices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of US$1,000,000 in the aggregate at any one time outstanding and (ii) to executive officers of Holdings on an arms-length basis in the ordinary course of business to permit such officers to purchase Equity Interests in Holdings (or to exercise options to purchase Equity Interests in Holdings) up to a maximum of US$5,000,000 in the aggregate at any one time outstanding;
(qf) Investments to the extent Borrowers and the Restricted Subsidiaries may enter into Hedging Agreements that payment for such Investments is made with Equity Interests of the Borrowerare permitted by Section 6.01(h);
(rg) Investments in the Borrowers or any Restricted Subsidiary may acquire all or substantially all the assets of a Person or line of business of such Person, or not less than 100% of the Equity Interests (other than directors’ qualifying shares) of one or more newly formed persons that are received in consideration of a Person (referred to herein as the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons“Acquired Entity”); provided, provided that (i) the fair market value Acquired Entity (or line of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (rbusiness acquired) shall not be in a similar line of business as that of the aggregate exceed $10,000,000 Borrowers and the Restricted Subsidiaries as conducted during the current and most recent calendar year (and any such assets acquired shall be used or useful in such line of business or reasonably related thereto or a logical extension thereof); and (ii) in respect at the time of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower transaction (A) both before and the Administrative Agent (x) immediately after giving effect to such contributionthereto, no Default or Event of Default shall have occurred and be continuing continuing; (B) the total consideration paid in connection with such acquisition and any other acquisitions pursuant to this Section 6.04(g) (including any Indebtedness of the Acquired Entity that is assumed by the Borrowers or would result therefromany Subsidiary following such acquisition and any payments following such acquisition pursuant to earn-out provisions or similar obligations) in which the Acquired Entity is designated as an Unrestricted Subsidiary or is otherwise an Excluded Subsidiary or to the extent such acquired line of business or assets do not become Collateral shall not in the aggregate exceed an amount equal to the sum of, without duplication, (1) the Available Amount, plus (2) other than in the case in which an Acquired Entity is to be designated as an Unrestricted Subsidiary, the aggregate amount of Indebtedness incurred by the Credit Parties under Section 6.01(g), (k), (l), (m), (n), (o), (p) and (r), in each case raised or incurred solely for the purpose of financing the proposed acquisition (it being understood and agreed that the designation of any Acquired Entity as an Unrestricted Subsidiary is subject to the satisfaction of the terms set forth in Section 6.12); (C) if the total consideration paid in connection with such acquisition exceeds US$35,000,000, the US Borrower shall have delivered a certificate of a Financial Officer, certifying as to the foregoing clauses (i) and (ii) and containing reasonably detailed calculations in support thereof, in a form reasonably satisfactory to the Administrative Agent; and (D) the Borrowers shall comply, and shall cause the Acquired Entity to comply, with the applicable provisions of Section 5.12 and the Security Documents (any acquisition of an Acquired Entity meeting all the criteria of this Section 6.04(g) being referred to herein as a “Permitted Acquisition”);
(h) subject to the provisions of the Security Documents, notes payable, or stock or other securities issued by account debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such account debtor’s accounts receivable in the ordinary course of business, consistent with past practices;
(i) Investments received in connection with the dispositions of assets permitted by Section 6.05;
(j) Investments in existence on the date hereof (including Investments by the Loan Parties in Equity Interests in their respective Subsidiaries) and set forth in Schedule 6.04;
(k) Investments constituting deposits described in Section 6.02(k) and Section 6.02(l);
(l) Investments constituting Indebtedness permitted under Section 6.01(h) or 6.01(k);
(m) the formation by (i) any US Loan Party of any Domestic Subsidiary, Canadian Subsidiary or Foreign Subsidiary, (ii) any Canadian Loan Party of any Canadian Subsidiary or Foreign Subsidiary, and (iii) any Foreign Subsidiary of any other Foreign Subsidiary, so long as, in each case: (x) the contribution or investment of any assets in such Person comply with the provisions of this Section 6.04, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed Loan Parties comply with Section 5.12, and (z) that the requirements no Event of clause (i) of this proviso remain satisfiedDefault has occurred and is continuing or would result after giving effect to such formation;
(sn) Investments consisting Guarantees by Holdings or the US Borrower of Restricted Payments permitted under Section 6.06;
(t) Investments obligations of Canadian Subsidiary Guarantors or Foreign Subsidiaries incurred in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customersnot constituting Indebtedness;
(uo) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, additional Investments by any Credit Party so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xi) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereofinvested, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date loaned or advanced pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(bparagraph (j) (determined without regard to the extent permitted by the proviso thereto any write-downs or write-offs of such investments, loans and advances) does not exceed, in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investmentaggregate, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that Available Amount and (ii) no Event of Default shall have has occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, continuing at the time of such Investment or as of would result therefrom;
(p) the date of Acquisition; and
(q) the definitive agreement with respect to such Investment, Transaction Related Intercompany Notes and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced other Investments contemplated by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofthe Intercompany Step Transactions.
Appears in 1 contract
Investments, Loans and Advances. Directly or indirectly, lend money or credit (by way of guarantee, assumption of debt or otherwise) or make advances to any person, or purchase or acquire any stock, bonds, notes, debentures or other obligations or securities of, or any other interest in, or make any capital contribution to, any other person (all of the foregoing, collectively, “Investments”); except, that the following shall be permitted:
(a) the Companies may consummate the Transactions in accordance with the provisions of the Transaction Documents;
(b) Investments outstanding on the Closing Date and identified on Schedule 6.04(b) and any renewals, amendments or replacements thereof that do not increase the amount thereof;
(c) the Companies may (i) Purchase or acquire (including pursuant acquire, hold and dispose of accounts receivable, chattel paper and notes receivable owing to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness them if created or other securities acquired in the ordinary course of any other personbusiness, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, utility and other similar deposits in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madebusiness;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets Hedging Obligations permitted under pursuant to Section 6.056.01(c);
(e) loans and advances to, or Guarantees of Indebtedness of, officers, to directors, employees and officers and service providers of Borrower and its Subsidiaries or consultants any direct or indirect holding company of Borrower, including Pubco, B&L Holdings or the Partnership, for bona fide business purposes and to purchase Equity Interests of Borrower or any direct or indirect holding company of Borrower, including Pubco, B&L Holdings or the Partnership, in an aggregate amount not to exceed $1,000,000 at any time outstanding;
(f) Investments (i) by Borrower in any Subsidiary Guarantor, including any entity that becomes a Subsidiary Guarantor in a Permitted Acquisition, (ii) by any Company in Borrower or any Subsidiary Guarantor and (iiii) by a Subsidiary of Borrower that is not a Subsidiary Guarantor in any other Subsidiary of Borrower that is not a Subsidiary Guarantor; provided, that any Investment in the form of a loan or advance shall be evidenced by the Intercompany Note;
(g) Investments in securities of trade creditors or customers in the ordinary course of business or and consistent with such Company’s past practice practices that are received in an aggregate outstanding amount (valued at the time settlement of the making thereof, and without giving effect bona fide disputes or pursuant to any subsequent change in value) not to exceed $10,000,000, (ii) in respect plan of payroll payments and expenses in reorganization or liquidation or similar arrangement upon the ordinary course of business bankruptcy or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount insolvency of such loans and advances shall be contributed trade creditors or customers or pursuant to the Borrower in cash as common equity;
(f) accounts receivableany litigation, security deposits and prepayments arising and trade credit granted in the ordinary course arbitration or other disputes with persons who are not Affiliates of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementsa Company;
(h) Investments existing onmergers, or contractually committed as of, the Closing Date consolidations and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as transactions in existence on the Closing Date or as otherwise permitted by this compliance with Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (llmade by Borrower or any Subsidiary as a result of consideration received in connection with a disposition made in compliance with Section 6.05(b);
(j) Investments by the Borrower or any Subsidiary Permitted Acquisitions and other acquisitions of property in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this compliance with Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)6.07;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change Dividends in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000compliance with Section 6.08;
(l) intercompany loans between Subsidiaries Investments of any person that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or becomes a Subsidiary as a result of a foreclosure by the Borrower on or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date date hereof or of a person merged into the Borrower consolidates, merges or merged into or consolidated amalgamates with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) such Investments exist at the fair market value of time such assetsperson is acquired, determined in good faith by the Borrowerconsolidated, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and merged or amalgamated, (ii) such Investments are not made in respect anticipation or contemplation of each such contributionperson becoming a Subsidiary or of such consolidation, a Responsible Officer merger or amalgamation, and (iii) such Investments are not directly or indirectly recourse to any of the Borrower shall certifyCompanies or any of their respective assets, in a form other than to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) acquired or the person that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of becomes a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(xm) Investments unsecured intercompany loans by the Borrower and its Subsidiaries, including loans any Company to any direct or indirect parent of the Borrower, if including Pubco, B&L Holdings or the Borrower or any other Subsidiary Partnership, evidenced by the Intercompany Note for purposes and in amounts that would otherwise be permitted to make a Restricted Payment in such amount (be made as Dividends to any direct or indirect parent of Borrower, including Pubco, B&L Holdings or the Partnership, pursuant to Sections 6.08(c)-(e); provided, that the principal amount of any such Investment intercompany loans shall also reduce, on a dollar-for-dollar basis, the amounts that would otherwise be deemed permitted to be a Restricted Payment under paid in the appropriate clause form of Section 6.06 for all purposes of this Agreement)Dividends pursuant to such Section;
(yn) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances Contingent Obligations permitted by Section 6.01 and, to members representing their deferred initiation deposits or feesthe extent not entered into in connection with Indebtedness, arising entered into in the ordinary course of business or consistent with past practicebusiness;
(aao) Investments in an aggregate amount not to exceed $20,000,000 at any time outstanding, made in exchange for, or out of the net cash proceeds of the sale of, Equity Interests of Borrower or any direct or indirect parent of Borrower, including Pubco, B&L Holdings or the Partnership, or from a cash equity capital contribution to Borrower; provided, that such Investments are made by Borrower using the cash proceeds received from the foregoing sales or contributions;
(p) Investments permitted by Section 6.02(f);
(q) the repurchase of Equity Interests deemed to occur upon the exercise of options to the extent such Equity Interests represent all or a portion of the exercise price of such options in an amount not to exceed $750,000 in any fiscal year;
(r) to the extent constituting Investmentsan Investment, purchases and acquisitions the repurchase, redemption, defeasance or other acquisition of inventory, supplies, materials and equipment or purchases Subordinated Indebtedness with the net cash proceeds from a substantially concurrent incurrence of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;permitted refinancing Indebtedness; and
(bbs) [reserved];
(cc) other Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary 2,500,000 on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofmade.
Appears in 1 contract
Samples: Credit Agreement (Edgen Group Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower Issuer and the Subsidiaries and (BSubsidiaries) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower Issuer or any Subsidiary Guarantor in the Equity Interests of the Borrower Issuer or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Guarantor; (ii) intercompany loans from the Borrower Issuer or any Subsidiary Guarantor to the Borrower Issuer or any SubsidiarySubsidiary Guarantor; and (iii) Guarantees by the Borrower Issuer or any Subsidiary Guarantor of Indebtedness otherwise permitted hereunder of the Borrower Issuer or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Guarantor;
(c) Permitted Investments and Investments that were Permitted Investments when madeInvestments;
(d) Investments arising out of the receipt by the Borrower Issuer or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.058.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower Issuer or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,0002,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice or industry practice and (iviii) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower Issuer in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or and consistent with past practice or industry practices and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementsin the ordinary course of business;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 8.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04)Date;
(i) Investments resulting from pledges and deposits under Sections 6.02(f8.02(f), (g), (o), (r), (s), (aa), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)[Reserved];
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m)[Reserved];
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or and consistent with past practice or industry practices or Investments acquired by the Borrower Issuer or a Subsidiary as a result of a foreclosure by the Borrower Issuer or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower Issuer or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.048.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 8.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower Issuer of obligations of one or more officers or other employees of Holdings, any Parent Entity, the Borrower Issuer or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower Issuer or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations, in each case to the extent permitted by Section 8.06(c);
(p) Guarantees by the Borrower Issuer or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower Issuer or any Subsidiary in the ordinary course of business or and consistent with past practicepractice or industry practices;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the BorrowerIssuer, Holdings or any Parent Entity;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied[Reserved];
(s) Investments consisting of Restricted Payments permitted under Section 6.068.06 (and without duplication of any baskets thereunder);
(t) Investments in the ordinary course of business or and consistent with past practice or industry practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reservedReserved];
(v) Guarantees permitted under Section 6.01 8.01 (except to the extent such Guarantee is expressly subject to this Section 6.048.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower Issuer or such Subsidiary;
(x) Investments by the Borrower Issuer and its Subsidiaries, including loans to any direct or indirect parent of the BorrowerIssuer, if the Borrower Issuer or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 8.06 and counted against the amount permitted under such clause for all purposes of this AgreementIndenture);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings[Reserved];
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice[Reserved];
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or non-exclusive licenses or leases of Intellectual Property in each case in the ordinary course of business or and consistent with past practice;practice and not constituting all or substantially all of the assets of another person; and
(bb) [reserved];
(cc) Investments received substantially contemporaneously in joint ventures; provided that the aggregate outstanding amount (valued at the time exchange for Equity Interests of the making thereofIssuer, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (Holdings or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofParent Entity.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(b) after giving effect to the applicable Investments, (i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from by the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided thatprovided, that as at of any date of determination, the aggregate outstanding amount of (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) ), shall not exceed the sum of (X) the greater of $15,000,00010,000,000 and 1% of Consolidated Total Assets plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition sale of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $10,000,00010,000,000 and 1% of Consolidated Total Assets in the aggregate at any time outstanding (calculated without regard to write downs or write offs thereof), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements renewals or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04Date);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 and 0.50 times 4.5% of Consolidated Total Assets, plus (Y) any portion of the EBITDA calculated Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Cumulative Credit immediately prior to such election and the amount thereof elected to be so applied so long as, at the time of and after giving effect thereto, the Net First Lien Leverage Ratio on a Pro Forma Basis for the then most recently ended Test Periodshall not be greater than 2.25 to 1.0, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment pursuant to this Section 6.04(j); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j) (except to the extent the preceding parenthetical does not apply);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations[Reserved];
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that both such amount contributed as Qualified Equity Interests and such Investment are not included in any determination of the Cumulative Credit;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 15,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customerscustomers consistent with past practice and industry practice;
(u) [reserved]Investments that constitute loans or advances in respect of intercompany current liabilities incurred in connection with the cash management operations of the Borrower and the Subsidiaries;
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Receivables Financings;
(z) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits or fees, arising joint marketing arrangements with other persons in the ordinary course of business or consistent with past practicebusiness;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practicebusiness;
(bb) [reserved]Investments received substantially contemporaneously in exchange for Qualified Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that both such amount contributed as Qualified Equity Interests and such Investment are not included in any determination of the Cumulative Credit;
(cc) Investments in joint ventures; provided that ventures in an aggregate amount not to exceed the aggregate outstanding amount sum of (valued at the time of the making thereof, and without giving effect to any subsequent changes in valueX) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 25,000,000 and 0.40 times 2.5% of Consolidated Total Assets, plus (Y) an aggregate amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received by the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodrespective investor in respect of investments theretofore made by it pursuant to this clause (cc); provided, that if any Investment pursuant to this Section 6.04(ccclause (cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc) (except to the extent the preceding parenthetical does not apply);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, a Similar Business in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in valuewrite downs or write offs thereof) not to exceed the sum of (X) the greater of $15,000,00050,000,000 and 4.5% of Consolidated Total Assets plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment; provided, that if any Investment the Person in which Investments pursuant to this Section 6.04(eeclause (dd) is are made in any person that was not a Subsidiary on the date on which such Investment was made but becomes shall become a Subsidiary thereafter; provided, then further that such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee6.04(dd) (except to the extent the preceding parenthetical does not apply);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhee) Investments made in any Unrestricted Subsidiaries in an aggregate amount (ivalued at the time of the making thereof, and without giving effect to any write downs or write offs thereof) not to exceed the sum of (X) the greater of $25,000,000 and 2.5% of Consolidated Total Assets plus (Y) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in connection with the exercise respect of any subscriptionssuch Investment; provided, options, warrants, calls, puts or other rights or commitments that if any Investment pursuant to agreements set forth on Schedule 3.08(bthis Section 6.04(ee) or (ii) is made in satisfaction of obligations under joint venture agreements existing any person that was not a Subsidiary on the Closing Datedate on which such Investment was made but becomes a Subsidiary thereafter, then such Investment shall, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee) (except to the extent the preceding parenthetical does not apply). The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b), 6.04(j) or Section 6.04(j6.04(dd) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be thereof (as determined in good faith by the Borrower and may be determined either, at the option of the Borrower, in good faith) valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (write-downs or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination write-offs thereof.
Appears in 1 contract
Samples: First Lien Credit Agreement (DS Services of America, Inc.)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business in connection with the cash management operations of Holdings and the Subsidiaries) to or consistent with past practiceGuarantees of the obligations of, or make or permit to exist any investment in (each, an "Investment"), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)any other person, except:
(a) [reserved]Guarantees by the Borrowers or any Subsidiary of operating leases (other than Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by any Borrower or any Subsidiary in the ordinary course of business;
(i) Investments by the Term Borrower or any Subsidiary in the Equity Interests of the Term Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Term Borrower or any Subsidiary to the Term Borrower or any Subsidiary; and (iii) Guarantees by the Term Borrower or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of the Term Borrower or any Subsidiary; provided that, as at any date that (I) the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries (other than the Term Borrower) that are not Domestic Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries (other than the Term Borrower) that are not Domestic Subsidiary Loan Parties pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries (other than the Term Borrower) that are not Domestic Subsidiary Loan Parties pursuant to subclause clause (iii) (other than, in each case, to the extent such Investments, Loans or Guarantees are made (1) by any subsidiary of the Term Borrower that is not a Loan Party or (2) by a Foreign Subsidiary Loan Party in or to another Foreign Subsidiary Loan Party) shall not exceed an aggregate amount equal to $15,000,000190.0 million (plus any return of capital actually received by the respective investors in respect of investments theretofore made by them pursuant to above clause b(i)), plus (y) the portion, if any, of the Available Investment Basket Amount on the date of such election that Holdings elects to apply to this Section 6.04(b)) and (II) no Guarantees (other than by one or more Subsidiaries organized under the laws of the People's Republic of China) may be given under this clause (b) in respect of Indebtedness permitted under Section 6.01(y);
(c) Permitted Investments and Investments investments that were Permitted Investments when made;
(d) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business;
(e) Investments of a Subsidiary acquired after the Closing Date or of a corporation merged into the Term Borrower or merged into or consolidated with a Subsidiary in accordance with Section 6.05 after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were inexistence on the date of such acquisition, merger or consolidation;
(f) Investments arising out of the receipt by the Borrower Holdings or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(eg) (i) loans and advances to, or Guarantees to employees of Indebtedness of, officers, directors, employees or consultants of the Borrower Holdings or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, 10.0 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fh) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(gi) Hedging Swap Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted pursuant to Section 6.14;
(hj) Investments existing on, or contractually committed as of, on the Closing Date and Investments made pursuant to binding commitments in effect on the Closing Date, in each case to the extent set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(ik) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(jl) other Investments by the Borrower Holdings or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed (i) $125.0 million (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment investments theretofore made by it pursuant to this Section 6.04(jparagraph (l)), plus (ii) is made in any person that was not a Subsidiary the portion, if any, of the Available Investment Basket Amount on the date on which such Investment was election is made but becomes a Subsidiary thereafter, then such Investment may, at that the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed Term Borrower elects to have been made pursuant apply to Section 6.04(b) this paragraph (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(jl);
(km) Investments constituting Permitted Business Acquisitions so long as immediately after giving effect in an aggregate amount, which shall be deemed to include the principal amount of Indebtedness that is assumed pursuant to Section 6.01 in connection with such Permitted AcquisitionBusiness Acquisitions, the Net Total Leverage Ratio on a Pro Forma Basis would not to exceed 4.00 to 1.00; provided that no Event $200.0 million (net of Default shall have occurred any return representing return of capital in respect of any such investment and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof); provided that (i) during any Permitted Business Acquisition Step-Up Period, and without giving effect such amount shall be increased to any subsequent change $300.0 million, plus the portion, if any, of the Available Investment Basket Amount on the date such election is made that the Term Borrower elects to apply to this paragraph (m); (ii) if assets acquired in value) of a Permitted Acquisitions of Subsidiaries that Business Acquisition are not acquired by the Term Borrower or a Domestic Subsidiary Loan Parties Party (or of assets a Person that are not owned by upon such acquisition becomes a Domestic Subsidiary Loan Parties Party) or if any Person acquired in a Permitted Business Acquisition is not merged into the Term Borrower or a Domestic Subsidiary Loan Party or does not become upon consummation of such Permitted Business Acquisition a Domestic Subsidiary Loan Party, the aggregate amount expended in respect thereof and for all such similar Permitted Business Acquisitions shall not exceed $65,000,000an amount equal to 50% of the amount of Permitted Business Acquisitions otherwise permitted under this Section 6.04(m); and (iii) that if the amount of Investments constituting Permitted Business Acquisitions in accordance with this Section 6.04(m) and outstanding at the time a Permitted Business Acquisition Step-Up Period ends exceeds the amount of Investments constituting Permitted Business Acquisitions that would be permitted under this Section 6.04(m) immediately after the end of such Permitted Business Acquisition Step-Up Period, then the amount of such excess (less the amount by which investments constituting Permitted Business Acquisitions are reduced from such time until the commencement of the next Permitted Business Acquisition Step-Up Period, if any) shall be deemed to be permitted under this Section 6.04(m); provided, further, that such excess, if any, shall be deemed an election by the Term Borrower to utilize the Available Investment Basket Amount in any amount equal to such excess;
(ln) additional Investments may be made from time to time to the extent made with proceeds of Equity Interests (excluding proceeds received as a result of the exercise of Cure Rights pursuant to Section 7.02) of Holdings, which proceeds or Investments in turn are contributed (as common equity) to the Term Borrower;
(o) intercompany loans between Foreign Subsidiaries that are not Loan Parties or from a Foreign Subsidiary to any Domestic Subsidiary of Holdings that is not a Loan Party and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(mSections 6.01(m)(i);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii), (iv) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligationsv);
(p) Guarantees by the Borrower or any Subsidiary Investments arising as a result of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicePermitted Receivables Financings;
(q) Investments to the extent that payment for such Investments is made with Equity Interests in respect of the BorrowerInitial Intercompany Loans and Initial Equity Contributions;
(r) Investments in purchases or other acquisitions after the Equity Interests Closing Date of one or more newly formed persons that are received in consideration shares of the contribution by Company that were outstanding on the Borrower Closing Date (or the applicable Subsidiary of assets (including Equity Interests and cash) to issued in exchange for such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedoutstanding shares);
(s) HC Investments consisting of Restricted Payments permitted under Section 6.06by Bidco, Midco and LP GmbH;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments including by the Borrower and its Subsidiaries, including loans to any direct or indirect parent transfer of assets) in joint ventures existing on the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment Closing Date in such an aggregate amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (assets transferred valued at the time of the making fair market value thereof, and without giving effect to any subsequent changes in value) of for all such Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee)25.0 million;
(ffu) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuingJV Reinvestments;
(ggv) [reserved]the Designated Acquisition; and
(hhw) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on Transaction and the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofRestructuring.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower Issuer and the Subsidiaries and (BSubsidiaries) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Investments of Future Fab Assets, Saarland Assets and/or Siler City Assets into one or more Holdco SPV Subsidiaries and SPV Subsidiaries in anticipation of the incurrence by such SPV Subsidiaries of any SLB Debt secured by, or with respect to, such assets; provided that Investments permitted pursuant to this clause (a) shall not be made more than thirty (30) days in advance of the incurrence of any such SLB Debt;
(i) Investments by the Borrower Issuer or any Subsidiary in the Equity Interests of the Borrower Issuer or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the Borrower Issuer or any Subsidiary to the Borrower Issuer or any Subsidiary; and (iii) Guarantees by the Borrower Issuer or any Subsidiary of Indebtedness otherwise or other obligations permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 8.01 (except to the extent such Guarantee is expressly subject to this Section 6.048.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
; provided that (x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(ccclause (b) shall by Note Parties in Subsidiaries that are not exceed the greater of $40,000,000 Note Parties and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment Guarantees made pursuant to this Section 6.04(ccclause (b) is made in by any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option Note Party of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case Indebtedness or other obligations of any Subsidiary that is not a Loan Party) and Note Party shall not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary 10,000,000 per fiscal year and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ffy) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of by any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment Note Party in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or Permitted Investments shall only be permitted to the extent either (A) such Investment was made in reliance on the foregoing clause (x) of this proviso or (B) such cash equivalents or Permitted Investments are subject to a first-priority Lien securing the Note Obligations and subject to an Account Control Agreement (provided, that this clause (y) shall be not limit the fair market value thereof, which shall be determined in good faith Investment by the Borrower Issuer or any Subsidiary in the form of cash or Permitted Investments in any Subsidiary that will incur Indebtedness pursuant to Sections 8.01(h), (l) or (n) up to an aggregate amount, together with any other amounts Invested in reliance on this parenthetical in any Subsidiary that has incurred (or will incur) Indebtedness pursuant to Sections 8.01(h), (l) or (n), not to exceed the lesser of (I) $100,000,000 and may be determined either, at the option (II) 15% of the Borroweraggregate principal amount of the Indebtedness incurred (or that will be incurred) under Sections 8.01(h), at (l) or (n) by such Subsidiary; provided further that any Investment made in reliance on this parenthetical shall only be permitted to the time extent required as an equity contribution into such Subsidiary by the financing source of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.Indebtedness);
Appears in 1 contract
Samples: Indenture (Wolfspeed, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practicepractice or industry norm), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]the Transactions;
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of Holdings (or any Parent Entity), the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice or industry norm in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practicepractice or industry norm, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice or industry norm and (iv) in connection with such person’s purchase of Equity Interests of the Borrower or Holdings (or any Parent Entity) solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice or industry norm and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers or customers made in the ordinary course of business or consistent with past practicepractice or industry norm;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h) Investments existing on, or contractually committed as of, the Closing Date and (provided, that any such Investment that is in excess of $5,000,000 shall be set forth on Schedule 6.04 6.04) and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the sum of (X) the greater of $50,000,000 140,000,000 and 0.50 0.30 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, plus (Y) any portion of the Cumulative Credit on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y), which such election shall (unless such Investment is made pursuant to clause (a) of the definition of “Cumulative Credit”) be set forth in a written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail the amount of Cumulative Credit elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, repurchases, redemptions, income and similar amounts) actually received in respect of any such Investment; provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or industry norm or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a person that becomes a Subsidiary acquired after the Closing Date (including by means of a Delaware LLC Division) or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 (other than Section 6.05(e)(i)) and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower or any Subsidiary of obligations of one or more directors, consultants, officers or other employees of Holdings, any Parent Entity, the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerHoldings or any Parent Entity, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such directors, consultants, officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicepractice or industry norm;
(q) Investments to the extent that payment for such Investments is made with or financed with the proceeds of the sale or issuance of Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that any proceeds of such sale or issuance of Equity Interests are not included in any determination of the Cumulative Credit;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by Holdings, the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice or industry norm consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved]loans and leases of animals to third parties for the purposes of exhibition, storage or breeding, as the case may be, in each case in the ordinary course of business and consistent with past practices;
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) (provided, that the outstanding amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 solely for all purposes of this Agreementdetermining capacity thereunder);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization FinancingsFinancings or receivables sales or similar factoring arrangements of Receivables Assets;
(z) loans Investments made in connection with obtaining, maintaining or advances to members representing their deferred initiation deposits or fees, arising renewing client and customer contracts in the ordinary course of business or consistent with past practicepractice or industry norm;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses licenses, leases or leases contributions of Intellectual Property in each case in the ordinary course of business or consistent with past practicepractice or industry norm;
(bb) [reserved]Investments received substantially contemporaneously in exchange for Equity Interests of the Borrower, Holdings or any Parent Entity; provided, that the issuance of such Equity Interests are not included in any determination of the Cumulative Credit;
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the sum of (X) the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; 140,000,000 and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany current liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business in connection with the cash management operations of Holdings and the Subsidiaries) to or consistent with past practiceGuarantees of the obligations of, or make or permit to exist any investment or any other interest in (each, an "Investment"), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)any other person, except:
(a) [reserved]Investments by Holdings in the Equity Interests of NI Acquisition Co. and the U.S. Borrower;
(i) Investments by the any Borrower or any Subsidiary in the Equity Interests of the any Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)Subsidiary; (ii) intercompany loans from the any Borrower or any Subsidiary to the any Borrower or any Subsidiary; and (iii) Guarantees by the U.S. Borrower or any Domestic Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of the U.S. Borrower or any Subsidiary; provided that, as at any date that the sum of determination, the aggregate outstanding amount (A) Investments (valued at the time of the making thereof, thereof and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause clause (i) in Subsidiaries that are not Domestic Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Domestic Subsidiary Loan Parties pursuant to subclause clause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Domestic Subsidiary Loan Parties pursuant to subclause clause (iii) ), shall not exceed an aggregate amount equal to (x) $15,000,000175.0 million (plus any return of capital actually received by the respective investors in respect of investments theretofore made by them pursuant to this paragraph b(i)), plus (y) the portion, if any, of the Available Investment Basket Amount on the date of such election that Holdings elects to apply to this Section 6.04(b);
(c) Permitted Investments and Investments investments that were Permitted Investments when made;
(d) Permitted NI Holdings Purchases;
(e) intercompany loans from NI Holdings to the U.S. Borrower; provided that such loans are subordinated to the Obligations in a manner reasonably acceptable to the Administrative Agent;
(f) Investments arising out of the receipt by the Borrower Holdings or any Subsidiary of non-cash noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(eg) (i) loans and advances to, or Guarantees to employees of Indebtedness of, officers, directors, employees or consultants of the Borrower Holdings or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, 10.0 million in the aggregate at any time outstanding (calculated without regard to write-downs or write-offs thereof) and (ii) in respect advances of payroll payments and expenses to employees in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(fh) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(gi) Hedging Swap Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted pursuant to Section 6.13;
(hj) Investments existing on, or contractually committed as of, on the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(ik) Investments resulting from pledges and deposits under referred to in Sections 6.02(f), (g), (o), (r), (s), (ee) and (llg);
(jl) other Investments by the Borrower Holdings or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed (i) $100.0 million (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment investments theretofore made by it pursuant to this Section 6.04(jparagraph (l)), plus (ii) is made in any person that was not a Subsidiary the portion, if any, of the Available Investment Basket Amount on the date on which such Investment was election is made but becomes a Subsidiary thereafter, then such Investment may, at that the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed U.S. Borrower elects to have been made pursuant apply to Section 6.04(b) this paragraph (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(jl);
(km) Investments constituting Permitted Business Acquisitions so long as immediately after giving effect in an aggregate amount, which shall be deemed to include the principal amount of Indebtedness that is assumed pursuant to Section 6.01 in connection with such Permitted AcquisitionBusiness Acquisitions, the Net Total Leverage Ratio on a Pro Forma Basis would not to exceed 4.00 to 1.00; provided that no Event (i) $150.0 million (net of Default shall have occurred any return representing return of capital in respect of any such investment and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof); provided that (x) during any Permitted Business Acquisition Step-Up Period, and without giving effect such amount shall be increased to $250.0 million, plus (y) the portion, if any, of the Available Investment Basket Amount on the date such election is made that the U.S. Borrower elects to apply to this paragraph (m), (ii) if any subsequent change person acquired in value) of a Permitted Acquisitions of Subsidiaries that are Business Acquisition is not merged into the U.S. Borrower or a Domestic Subsidiary Loan Parties Party or does not become upon consummation of assets that are not owned by such Permitted Business Acquisition a Domestic Subsidiary Loan Parties Party, the aggregate amount expended in respect thereof and for all such similar Permitted Business Acquisitions shall not exceed $65,000,000an amount equal to 50% of the amount of Permitted Business Acquisitions otherwise permitted under this Section 6.04(m) and (iii) that if the amount of Investments constituting Permitted Business Acquisitions in accordance with this Section 6.04(m) and outstanding at the time a Permitted Business Acquisition Step-Up Period ends exceeds the amount of Investments constituting Permitted Business Acquisitions that would be permitted under this Section 6.04(m) immediately after the end of such Permitted Business Acquisition Step-Up Period, then the amount of such excess (less the amount by which investments constituting Permitted Business Acquisitions are reduced from such time until the commencement of the next Permitted Business Acquisition Step-Up Period, if any) shall be deemed to be permitted under this Section 6.04(m); provided, further, that such excess, if any, shall be deemed an election by the U.S. Borrower to utilize the Available Investment Basket Amount in any amount equal to such excess;
(ln) additional Investments may be made from time to time to the extent made with proceeds of Equity Interests (excluding proceeds received as a result of the exercise of Cure Rights pursuant to Section 7.03) of Holdings, which proceeds or Investments in turn are contributed (as common equity) to the U.S. Borrower or NI Acquisition Co.;
(o) intercompany loans between Foreign Subsidiaries that are not Loan Parties or from a Foreign Subsidiary to any Domestic Subsidiary of NI Holdings that is not a Loan Party and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m6.01(m)(i), (ii), (iv) and (v);
(mp) Investments arising as a result of Permitted Receivables Financings;
(q) the Transactions and the Post-Closing Reorganization;
(r) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultbusiness;
(ns) Investments of a Subsidiary acquired after the Closing Date or of a person corporation merged into the U.S. Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) after the Closing Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence inexistence on the date of such acquisition, merger or consolidation;
(ot) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Investments constituting Equity Interests of Nalco India that represent the Borrower, so long purchase of a minority interest in Nalco India not owned on the Closing Date and required to be purchased as no cash is actually advanced by the Borrower or any a result of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;Transactions; and
(pu) Guarantees by the Borrower Borrowers or any Subsidiary of operating leases (other than Capitalized Capital Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofbusiness.
Appears in 1 contract
Samples: Credit Agreement (Nalco Energy Services Equatorial Guinea LLC)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Guarantees permitted by Section 6.01;
(b) (i) Investments by the Borrower or any Subsidiary Loan Party in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); Loan Party;
(ii) intercompany loans from the Borrower or Investments by any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made Loan Party in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of Loan Party or any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(kiii) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred other intercompany liabilities amongst Parent and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount its Subsidiaries (valued at the time of the making thereof, and without giving effect to any subsequent change in valueor solely amongst its Subsidiaries) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent in connection with past practice or the cash management operations of Parent and its Subsidiaries; and
(iv) (A) Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment Guarantor in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan PartyParty (together with the aggregate amount of investments made pursuant to clause (iv) and not in reliance on this Section 6.04(cc);
(ddof the definition of “Permitted Acquisition”) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; providedthe Non-Loan Party Investment Cap, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhB) Investments made (i) in connection with the exercise Shorts Acquisition (including Investments in connection with any reorganization transactions prior to or following the Shorts Acquisition to facilitate the consummation of any subscriptionsthe Shorts Acquisition or the integration of the target of the Shorts Acquisition), options, warrants, calls, puts (C) Investments in Short Brothers plc from time to time to finance its payment of levy or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at BEIS Agreement, including any time pursuant to payment in connection with the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election termination of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such InvestmentBEIS Agreement, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amountsD) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be Indebtedness permitted solely by reference to one category of permitted Investments (or any portion thereof) described in under Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.6.01(e);
Appears in 1 contract
Samples: Term Loan Credit Agreement (Spirit AeroSystems Holdings, Inc.)
Investments, Loans and Advances. Directly or indirectly, lend money or credit (iby way of guarantee or otherwise) Purchase or make advances to any person, or purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other obligations or securities of of, or any other interest in, or make any capital contribution to, any other person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract (all of the foregoing, collectively, “Investments”), except that the following shall be permitted:
(a) the Companies may consummate the Transactions in accordance with the provisions of the Transaction Documents;
(b) Investments outstanding on the Closing Date and identified on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts receivable owing to any of them if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary terms, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person invest in, acquire and hold cash and Cash Equivalents, (other than in respect of (Aiii) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made endorse negotiable instruments held for collection in the ordinary course of business or consistent with past practice)(iv) make lease, or (iii) purchase or otherwise acquire, utility and other similar deposits in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved];
(i) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when madebusiness;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets Hedging Obligations permitted under pursuant to Section 6.056.01(c);
(e) loans and advances to, or Guarantees of Indebtedness of, officers, to directors, employees or consultants and officers of Borrower and the Subsidiaries for bona fide business purposes and to purchase Equity Interests of Holdings, in aggregate amount not to exceed $1,000,000 at any time outstanding; provided that, following an IPO of any Company, no loans in violation of Section 402 of the Xxxxxxxx-Xxxxx Act shall be permitted hereunder;
(f) Investments (i) by Borrower in Holdings or any Subsidiary Guarantor, including any entity that becomes a Subsidiary Guarantor in a Permitted Acquisition, (iii) by any Company in Borrower, Holdings or any Subsidiary Guarantor and (iii) by a Subsidiary of Borrower that is not a Subsidiary Guarantor in any other Subsidiary of Borrower that is not a Subsidiary Guarantor; provided that any Investment in the form of a loan or advance shall be evidenced by the Intercompany Note;
(g) Investments in securities of trade creditors or customers in the ordinary course of business or and consistent with such Company’s past practice practices that are received in an aggregate outstanding amount (valued at the time settlement of the making thereof, and without giving effect bona fide disputes or pursuant to any subsequent change in value) not to exceed $10,000,000, (ii) in respect plan of payroll payments and expenses in reorganization or liquidation or similar arrangement upon the ordinary course of business bankruptcy or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount insolvency of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business creditors or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementscustomers;
(h) Investments existing on, or contractually committed as of, the Closing Date mergers and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as consolidations in existence on the Closing Date or as otherwise permitted by this compliance with Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll)made by Borrower or any Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 6.06;
(j) Investments by the Borrower or any Subsidiary Acquisitions of property in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this compliance with Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)6.07;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change Dividends in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000compliance with Section 6.08;
(l) intercompany loans between Subsidiaries Investments of any person that becomes a Subsidiary on or after the date hereof in an aggregate amount not to exceed $1,000,000 on the date such person becomes a Subsidiary; provided that (i) such Investments exist at the time such person is acquired, (ii) such Investments are not Loan Parties made in anticipation or contemplation of such person becoming a Subsidiary, and Guarantees by Subsidiaries that (iii) such Investments are not Loan Parties permitted by Section 6.01(m)directly or indirectly recourse to any of the Companies or any of their respective assets, other than to the person that becomes a Subsidiary;
(m) other Investments received in connection with an aggregate amount not to exceed $2,000,000 on the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or date such Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;are made; and
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Dateunsecured intercompany loans, in each case, (i) by any Company to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions Holdings evidenced by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries Intercompany Note for purposes and in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations amounts that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, be made as Dividends to Holdings pursuant to Sections 6.08(b)-(d); provided that the principal amount of any such Investment loans shall also reduce Dollar-for-Dollar the amounts that would otherwise be deemed permitted to be a Restricted Payment under the appropriate clause of Section 6.06 paid for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than purpose in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect Dividends pursuant to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofSection.
Appears in 1 contract
Samples: First Lien Credit Agreement (Critical Homecare Solutions Holdings, Inc.)
Investments, Loans and Advances. Neither Borrower nor any Restricted Subsidiary will, directly or indirectly, make any Investment, except for the following: (a) Investments outstanding on the Closing Date and identified on Schedule 10.04 and any Investments received in respect thereof without the payment of additional consideration (other than through the issuance of or exchange of Qualified Capital Stock); (b) Investments in cash and Cash Equivalents (including Investments that were Cash Equivalents when made); (c) Borrower may enter into Swap Contracts to the extent permitted by Section 10.01(c); (d) Investments (i) Purchase or acquire (including pursuant to by Borrower in any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other personRestricted Subsidiary, (ii) make by any loans Restricted Subsidiary in Borrower and (iii) by a Restricted Subsidiary in another Restricted Subsidiary; provided that, in each case, any intercompany loan (it being understood and agreed that intercompany receivables or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business do not constitute loans) in excess of $20.0 million individually shall be evidenced by a promissory note and, to the extent that the payee, holder or consistent with past practice)lender of such intercompany loan is a Credit Party, or such promissory note shall be pledged (iiiand delivered) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all by such Credit Party to Collateral Agent on behalf of the property Secured Parties; (e) Borrower and its Restricted Subsidiaries may sell or transfer assets to the extent permitted by Section 10.05; (f) Investments in securities of trade creditors or business customers received pursuant to any plan of another person reorganization or (y) assets constituting a business unit, line of business similar arrangement upon the bankruptcy or division insolvency of such person trade creditors or customers or in settlement of delinquent or overdue accounts in the ordinary course of business; (each of the foregoing, an “Investment”), except:
(a) [reserved];
(ig) Investments made by the Borrower or any Restricted Subsidiary in the Equity Interests of the Borrower with, or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment)of, consideration received in connection with an Asset Sale made in compliance with Section 10.05; (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (Ah) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) officers, directors and employees in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after not to exceed $10.0 million in the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause aggregate at any time outstanding; (iii) Permitted Acquisitions; (j) accounts receivable, security deposits, prepayments (including prepayments of expenses), plus credits and extensions of trade credit (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant including to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (igaming customers) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.
Appears in 1 contract
Samples: Credit Agreement (Wynn Resorts LTD)
Investments, Loans and Advances. (i) Purchase Make any advance, loan, extension of credit or acquire (including pursuant to capital contribution to, or purchase any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestsstock, evidences of Indebtedness bonds, notes, debentures or other securities of or any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unitunit of, line of business or division of such person make any other investment (each of the foregoingan "Investment") in, an “Investment”)any Person, except:
(a) [reserved]Investments existing on the Closing Date and set forth on Schedule 6.03(a);
(ib) Investments by the Borrower or any Subsidiary in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any Subsidiary; cash and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000Cash Equivalents;
(c) Permitted Investments and Investments that were Permitted Investments when madeconstituting Capital Expenditures permitted pursuant to Section 6.11;
(d) Investments arising out extensions of trade credit in the receipt by the Borrower or any Subsidiary ordinary course of non-cash consideration for the Disposition of assets permitted under Section 6.05business;
(e) loans and advances to, or Guarantees of Indebtedness of, to officers, directorsdirectors or employees of Parent or its Subsidiaries (i) for travel, entertainment and relocation expenses in the ordinary course of business, (ii) for other purposes in an aggregate amount for Parent and its Subsidiaries not to exceed $1,500,000 at any one time outstanding and (iii) relating to indemnification or reimbursement of any officers, directors or employees in respect of liabilities relating to their serving in any such capacity or consultants of the as otherwise specified in Section 6.07;
(f) Investments in Parent, either Borrower or any Subsidiary wholly owned Subsidiary;
(ig) Investments in the nature of pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or consistent with past practice otherwise described in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000Section 6.02(d), (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementse)or(i);
(h) Investments existing on, representing non-cash consideration received by Parent or contractually committed as of, any of its Subsidiaries in connection with any sale or other disposition of the Closing Date and set forth on Schedule 6.04 and property of Parent or any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise its Subsidiaries permitted by this Section 6.04)6.05;
(i) Investments resulting from pledges and deposits under Sections 6.02(f)by Parent or any of its Subsidiaries in one or more Persons in connection with joint ventures or similar arrangements in respect of which no other co-investor or other Person has a greater legal or beneficial ownership interest than Parent or such Subsidiary, in an aggregate amount, when added to the amount of Permitted Acquisitions made pursuant to paragraph (g)n) below, (o), (r), (s), (ee) and (ll)not to exceed $25,000,000 at any one time outstanding;
(j) Investments representing evidences of Indebtedness, securities or other property received from another Person in connection with any bankruptcy proceeding or other reorganization of such other Person or as a result of foreclosure, perfection or enforcement of any Lien or exchange for evidences of Indebtedness, securities or other property of such other Person, provided that any such securities or other property received by any Loan Party party to any Security Document is pledged to the Borrower or any Subsidiary in an aggregate outstanding amount (valued at Collateral Agent for the time benefit of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment Secured Parties pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j)Security Documents;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect loans and advances to Management Investors in connection with the purchase by such Permitted AcquisitionManagement Investors of Capital Stock of an Ultimate Parent, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 Parent or any of its Subsidiaries of up to 1.00; $10,000,000 outstanding at any time, provided that no Event of Default such amount shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, reduced by the aggregate outstanding principal amount (valued at the time of the making thereof, and without giving effect to any subsequent change Indebtedness in value) respect of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned Guarantees permitted by Subsidiary Loan Parties shall not exceed $65,000,000Section 6.01(d)(ii);
(l) intercompany loans between Subsidiaries that are not Loan Parties Investments in (i) the Capital Stock of Parent which is held by Parent as treasury stock and Guarantees is restored to unissued status or is eliminated from authorized shares, or options in respect thereof or (ii) the Capital Stock of Parent or an Ultimate Parent purchased by Subsidiaries that are not Loan Parties permitted JCI in connection with the exercise of management stock options issued by Section 6.01(m)JCI to officers, directors and employees of Parent and its Subsidiaries;
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts Parent and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or its Subsidiaries under any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in defaultHedging Agreements;
(n) Investments the acquisition of all or substantially all of the business or assets or the Capital Stock of any Person or any business unit thereof (a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date"Permitted Acquisition"), in each case, provided that:
(i) to the extent such acquisition, merger or consolidation acquisition is expressly permitted under this by Section 6.04, ; and
(ii) in the case of aggregate consideration (including cash and any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or Indebtedness assumed in connection with such acquisitionacquisitions) for all such acquisitions made pursuant to this paragraph (n), merger or consolidation and were in existence on when added to the date amount of such acquisitionInvestments permitted pursuant to paragraph (i) above, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or does not exceed $25,000,000 at any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, time outstanding; provided in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
that, (q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (iA) the fair market value target of such assetsacquisition has positive Consolidated EBITDA, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, calculated on a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately pro forma basis after giving effect to such contributionacquisition (such calculation to be made in a manner reasonably satisfactory to the Administrative Agent and to be evidenced by a certificate in form and substance reasonably satisfactory to the Administrative Agent signed by a Responsible Officer of each Borrower and delivered to the Administrative Agent (which shall promptly deliver copies to each Lender) at least three Business Days prior to the consummation of such acquisition) and (B) before, and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or would occur as a result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedsuch acquisition;
(so) Investments consisting of Restricted Payments in notes receivable and other instruments and securities obtained in connection with transactions permitted under by Section 6.066.05(d);
(tp) Investments loans and advances to Consultants in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if 5,000,000 outstanding at any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee)time;
(ffq) Investments in the Capital Stock of an Ultimate Parent purchased or otherwise acquired in connection with any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on Exercise or a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuingPermitted Ultimate Parent Payment;
(ggr) [reserved]additional Investments in an aggregate amount not to exceed $10,000,000 at any one time outstanding; and
(hhs) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofTransactions.
Appears in 1 contract
Samples: Credit Agreement (Dirsamex Sa De Cv)
Investments, Loans and Advances. (i) Purchase Purchase, hold or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interestscapital stock, evidences of Indebtedness indebtedness or other securities of any other personof, (ii) make or permit to exist any loans or advances to, or make or permit to exist any investment or Guarantees of the Indebtedness of any other person (interest in, any other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice), or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”)person, except:
(a) [reserved];
investments (i) Investments by existing on the Borrower or any Subsidiary Closing Date in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result Subsidiaries of such Investment)Holdings; (ii) intercompany loans from by Holdings in the Borrower or any Subsidiary to Equity Interests of the Borrower or any SubsidiaryBorrower, CapCo II and Opco GP; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder the Borrower in any 90% Subsidiary of the Borrower or any Subsidiary; provided that, that is a Guarantor (so long as at any date of determination, the aggregate outstanding amount (valued at the time such Guarantor shall remain a 90% Subsidiary of the making thereof, and without Borrower after giving effect to such investment); (iv) by any subsequent change 90% Subsidiary of the Borrower in valueany Wholly Owned Subsidiary of the Borrower that is a Guarantor; or (v) by any Subsidiary of the Borrower that is not a Guarantor in any 90% Subsidiary of the Borrower that is not a Guarantor (A) Investments made so long as such Subsidiary shall remain a 90% Subsidiary of the Borrower after the Closing Date by the Loan Parties pursuant giving effect to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iisuch investment), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(cb) Permitted Investments and Investments investments that were Permitted Investments when made;
(dc) Investments investments arising out of the receipt by the Borrower or any Subsidiary of non-cash the Borrower of noncash consideration for the Disposition sale of assets permitted under Section 6.05;
(ed) intercompany loans permitted to be incurred as Indebtedness under Sections 6.01(a), (f), (n), (o) and (v);
(i) loans and advances toto employees of Holdings, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or their Subsidiaries not to exceed $10,000,000 in the aggregate at any Subsidiary time outstanding (icalculated without regard to write-downs or write-offs thereof), (ii) advances of payroll payments and expenses to employees in the ordinary course of business and (iii) and (iii) during the period ending on the first anniversary of the Closing Date, loans to employees of Holdings or consistent with past practice its Subsidiaries for relocation expenses in an aggregate outstanding amount (valued at the time of the making calculated without regard to write-down or write-offs thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity3,000,000 at any time outstanding;
(fi) accounts receivable, security deposits and prepayments receivable arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any (ii) prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g) Hedging Interest Rate Protection Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspermitted pursuant to Section 6.01(d);
(h) Investments investments existing on, or contractually committed as of, on the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments investments resulting from pledges and deposits under Sections 6.02(f), referred to in Section 6.02(g) or (g), (o), (r), (s), (ee) and (llh);
(j) Investments other investments by the Borrower or any Subsidiary and its Subsidiaries in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $75,000,000 (plus any returns of capital actually received by the greater respective investor in respect of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodinvestments theretofore made by it pursuant to this clause (j)); provided that if at any Investment time additional investments may be made pursuant to this Section 6.04(jclause (j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option election of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made which additional investments pursuant to Section 6.04(b) (this proviso shall only be permitted to the extent permitted by that the proviso thereto in Borrower so elects (x) to apply an amount not to exceed the case Available Investment Basket Amount at such time to the making of any Subsidiary that is not a Loan Partythe respective investment pursuant to this clause (j) and not in reliance on and/or (y) to make additional investments pursuant to this Section 6.04(j)clause (j) with the proceeds of Designated Capital Contributions;
(k) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, investments by the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event Borrower and its Subsidiaries in Foreign Subsidiaries of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the Borrower in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not to exceed $65,000,000125,000,000 (plus any returns of capital actually received by the respective investor in respect of investments theretofore made by it pursuant to this clause (k)); provided that at any time additional investments may be made pursuant to this clause (k) at the election of the Borrower, which additional investments pursuant to this proviso shall only be permitted to the extent that the Borrower so elects (x) to apply an amount not to exceed the Available Investment Basket Amount at such time to the making of the respective investment pursuant to this clause (k) and/or (y) to make additional investments pursuant to this clause (k) with the proceeds of Designated Capital Contributions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m)investments constituting Permitted Business Acquisitions;
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by Holdings shall be permitted to contribute to the Borrower or a Subsidiary as a result the proceeds of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default(i) Designated Capital Contributions, and (ii) Special Capital Contributions;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions investments by the Borrower of obligations of one or more officers or other employees of the Borrower or and its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the BorrowerJoint Ventures, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, aggregate amount so contributed invested pursuant to this clause (rn) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes write-downs or write-offs thereof) does not exceed $45,000,000 (plus any returns of capital actually received by the respective investor in value) respect of Investments investments theretofore made after the Closing Date by it pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Periodclause (n)); provided, provided that if at any Investment time additional investments may be made pursuant to this Section 6.04(ccclause (n) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hh) Investments made (i) in connection with the exercise of any subscriptions, options, warrants, calls, puts or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or (ii) in satisfaction of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, which additional investments pursuant to this proviso shall only be increased by permitted to the extent that the Borrower so elects (x) to apply an amount of Investments that could be made not to exceed the Available Investment Basket Amount at such time under to the other Related Section; provided, that making of the amount respective investment pursuant to this clause (n) and/or (y) to make additional investments pursuant to this clause (n) with the proceeds of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than Designated Capital Contributions;
(o) the Borrower or a Subsidiary Loan Party that and its Subsidiaries may enter into and perform its obligations under Other Hedging Agreements entered into in the ordinary course of business and so long as any such Other Hedging Agreement is otherwise not speculative in nature;
(p) investments expressly permitted by this Section 6.04 6.05;
(q) additional investments may be made through intermediate Investments in Subsidiaries from time to time to the extent made with proceeds of Equity Interests (excluding proceeds of Designated Capital Contributions, proceeds received as a result of the exercise of Cure Rights pursuant to Section 7.02 and that portion (if any) of the proceeds of an initial public offering of the common stock of Holdings that are not Loan Parties and such intermediate Investments shall be disregarded for purposes utilized to (x) repay up to $25,000,000 of determining outstanding Revolving Loans and/or Swingline Loans (to the outstanding amount of Investments extent outstanding) or (y) repay B Term Loans pursuant to any clause set forth above. The amount Section 2.12(c)) of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereofHoldings, which shall be determined proceeds or investments in good faith by turn are contributed to the Borrower and may be determined either, at the option Borrower;
(r) investments made as part of the Borrower, at Xxxxxx County Bond Transactions in accordance with the time of such Investment or as of definition thereof;
(s) the date of IPO Reorganization; and
(t) the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereofAcquisition.
Appears in 1 contract
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a) [reserved]Guarantees permitted by Section 6.01;
(b) (i) Investments by the Borrower or any Subsidiary Loan Party in the Equity Interests of the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result of such Investment); Loan Party;
(ii) intercompany loans from the Borrower or Investments by any Subsidiary to the Borrower or any Subsidiary; and (iii) Guarantees by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary; provided that, as at any date of determination, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of (A) Investments made after the Closing Date by the Loan Parties pursuant to subclause (i) in Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside the ordinary course of business after the Closing Date by the Loan Parties to Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (ii), plus (C) outstanding Guarantees by the Loan Parties of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000;
(c) Permitted Investments and Investments that were Permitted Investments when made;
(d) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e) loans and advances to, or Guarantees of Indebtedness of, officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equity;
(f) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practice;
(g) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreements;
(h) Investments existing on, or contractually committed as of, the Closing Date and set forth on Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i) Investments resulting from pledges and deposits under Sections 6.02(f), (g), (o), (r), (s), (ee) and (ll);
(j) Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) not to exceed the greater of $50,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that if any Investment pursuant to this Section 6.04(j) is made Loan Party in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of Loan Party or any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(j);
(kiii) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred other intercompany liabilities amongst Parent and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount its Subsidiaries (valued at the time of the making thereof, and without giving effect to any subsequent change in valueor solely amongst its Subsidiaries) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent in connection with past practice or the cash management operations of Parent and its Subsidiaries; and
(iv) (A) Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment Guarantor in default;
(n) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(o) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute Indebtedness, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice;
(q) Investments to the extent that payment for such Investments is made with Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value of such assets, determined in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfied;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u) [reserved];
(v) Guarantees permitted under Section 6.01 (except to the extent such Guarantee is expressly subject to this Section 6.04);
(w) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x) Investments by the Borrower and its Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 for all purposes of this Agreement);
(y) Investments consisting of Securitization Assets or arising as a result of Permitted Securitization Financings;
(z) loans or advances to members representing their deferred initiation deposits or fees, arising in the ordinary course of business or consistent with past practice;
(aa) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;
(bb) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan PartyParty (together with the aggregate amount of investments made pursuant to clause (iv) and not in reliance on this Section 6.04(cc);
(ddof the definition of “Permitted Acquisition”) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; providedthe Non-Loan Party Investment Cap, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 1.75 to 1.00; provided that no Event of Default shall have occurred and be continuing;
(gg) [reserved]; and
(hhB) Investments made (i) in connection with the exercise Impending Acquisition (including (i) Investments in connection with any reorganization transactions prior to or following an Impending Acquisition to facilitate the consummation of any subscriptions, options, warrants, calls, puts such Impending Acquisition or other rights or commitments pursuant to agreements set forth on Schedule 3.08(b) or the integration of the target of such Impending Acquisition and (ii) in satisfaction contributions to Short Brothers plc from time to time to finance its payment of levy obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at any time pursuant to the proviso in BEIS Agreement) and (C) Indebtedness permitted under Section 6.04(b) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section shall be treated as having been used under the other Related Section. Any Investment in any person other than the Borrower or a Subsidiary Loan Party that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, at the time of such Investment or as of the date of the definitive agreement with respect to such Investment, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination thereof.6.01(e);
Appears in 1 contract
Samples: Term Loan Credit Agreement (Spirit AeroSystems Holdings, Inc.)
Investments, Loans and Advances. (i) Purchase or acquire (including pursuant to any merger with a person that is not a Wholly Owned Subsidiary immediately prior to such merger) any Equity Interests, evidences of Indebtedness or other securities of any other person, (ii) make any loans or advances to or Guarantees of the Indebtedness of any other person (other than in respect of (A) intercompany liabilities incurred in connection with the cash management, tax and accounting operations of the Borrower and the Subsidiaries and (B) intercompany loans, advances or Indebtedness having a term not exceeding 364 days (inclusive of any roll-overs or extensions of terms) and made in the ordinary course of business or consistent with past practice)person, or (iii) purchase or otherwise acquire, in one transaction or a series of related transactions, (x) all or substantially all of the property and assets or business of another person or (y) assets constituting a business unit, line of business or division of such person (each of the foregoing, an “Investment”), except:
(a69) [reserved]Investments to effect the Transactions;
(70) (i) Investments (x) by the Borrower or any Subsidiary in the Equity Interests of any Subsidiary as of the Closing Date and set forth on Part A of Schedule 6.04 and (y) by the Borrower or any Subsidiary (or any entity that will become a Subsidiary as a result consisting of such Investment); (ii) intercompany loans from the Borrower or any Subsidiary to the Borrower or any SubsidiarySubsidiary as of the Closing Date and set forth on Part B of Schedule 6.04; and provided, that to the extent any such intercompany loan that is owing by a non-Guarantor Subsidiary to the Borrower or any Guarantor (iiithe “Scheduled Loans”) Guarantees (or any additional Investments made by the Borrower or any Subsidiary of Indebtedness otherwise permitted hereunder of Guarantor pursuant to this proviso) is repaid after the Closing Date or the Borrower or any SubsidiaryGuarantor receives, after the Closing Date, any dividend, distribution, interest payment, return of capital, repayment or other cash amount in respect of any scheduled Investment in the Equity Interests of any non-Guarantor Subsidiary (a “Return of Scheduled Equity”), then additional Investments may be made by the Borrower or any Guarantor in any non-Guarantor Subsidiary in an aggregate amount up to the amount actually received by the Borrower or any Guarantor after the Closing Date as payment in respect of such Investments; provided that, as at any date of determination, further that in no event will the aggregate outstanding amount (valued at of additional Investments made by the time Borrower or any Guarantor in non-Guarantor Subsidiaries pursuant to this proviso exceed the sum of the making thereof, original principal amount of the Scheduled Loans on the Closing Date and without giving effect to the aggregate amount of Returns of Scheduled Equity; (ii) Investments in the Borrower or any subsequent change Guarantor; (iii) Investments by any Subsidiary that is not a Loan Party in valueany other Subsidiary that is not a Loan Party; (iv) of (A) Investments by the Borrower or any Guarantor in any Subsidiary that is not Loan Party in an aggregate amount for all such outstanding Investments made after the Closing Date by not to exceed the Loan Parties pursuant to subclause greater of $125.0 million and 5.0% of Consolidated Total Assets when made; (iv) other intercompany liabilities amongst the Borrower and the Guarantors incurred in the ordinary course of business; (vi) other intercompany liabilities amongst Subsidiaries that are not Subsidiary Loan Parties, plus (B) net outstanding intercompany loans made outside Guarantors incurred in the ordinary course of business after in connection with the Closing Date cash management operations of such Subsidiaries; and (vii) Investments by the Borrower or any Guarantor in any Subsidiary that is not a Loan Parties Party consisting solely of (x) the contribution or other Disposition of Equity Interests or Indebtedness of any other Subsidiary that is not a Loan Party held directly by the Borrower or such Guarantor in exchange for Indebtedness, Equity Interests (or additional share premium or paid in capital in respect of Equity Interests) or a combination thereof of the Subsidiary to Subsidiaries which such contribution or other Disposition is made or (y) an exchange of Equity Interests of any other Subsidiary that are is not Subsidiary a Loan Parties Party for Indebtedness of such Subsidiary; provided, that immediately following the consummation of an Investment pursuant to the preceding subclause (iix) or (y) of this clause (vii), plus (C) outstanding Guarantees by the Loan Parties Subsidiary whose Equity Interests or Indebtedness are the subject of Indebtedness after the Closing Date of Subsidiaries that are not Subsidiary Loan Parties pursuant to subclause (iii) shall not exceed $15,000,000such Investment remains a Subsidiary;
(c71) Permitted Investments and Investments that were Permitted Investments when made;
(d72) Investments arising out of the receipt by the Borrower or any Subsidiary of non-cash consideration for the Disposition of assets permitted under Section 6.05;
(e73) loans and advances to, or Guarantees of Indebtedness of, to officers, directors, employees or consultants of the Borrower or any Subsidiary (i) in the ordinary course of business or consistent with past practice in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed $10,000,000, (ii) in respect of payroll payments and expenses in the ordinary course of business or consistent with past practice, and (iii) for business-related travel expenses, moving expenses and other similar expenses, in each case, incurred in the ordinary course of business or consistent with past practice and (iv) in connection with such person’s purchase of Equity Interests of the Borrower solely to the extent that the amount of such loans and advances shall be contributed to the Borrower in cash as common equityBorrower;
(f74) accounts receivable, security deposits and prepayments arising and trade credit granted in the ordinary course of business or consistent with past practice and any assets or securities received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss and any prepayments and other credits to suppliers made in the ordinary course of business or consistent with past practicebusiness;
(g75) Hedging Agreements entered into for non-speculative purposes and Permitted Call Spread Agreementspurposes;
(h76) Investments (not in Subsidiaries, which are provided in clause (b) above) existing on, or contractually committed as of, the Closing Date and set forth on Part C of Schedule 6.04 and any extensions, renewals, replacements or reinvestments thereof, so long as the aggregate amount of all Investments pursuant to this clause (h) is not increased at any time above the amount of such Investment existing or committed on the Closing Date (other than pursuant to an increase as required by the terms of any such Investment or contractual commitment as in existence on the Closing Date or as otherwise permitted by this Section 6.04);
(i77) Investments resulting from pledges and deposits under Sections 6.02(fXxxxxxxx 0.00(x), (gx), (ox), (rx), (sx), (eexx) and (lljj);
(j78) other Investments by the Borrower or any Subsidiary in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in valuewrite-downs or write-offs thereof) not to exceed the sum of (X) the greater of $50,000,000 230.0 million and 0.50 times 10.0% of Consolidated Total Assets when made, plus (Y) so long as no Default or Event of Default shall have occurred and be continuing, any portion of the EBITDA calculated Available Amount on the date of such election that the Borrower elects to apply to this Section 6.04(j)(Y) in a Pro Forma Basis for written notice of a Responsible Officer thereof, which notice shall set forth calculations in reasonable detail of the then most recently ended Test Periodamount of Available Amount immediately prior to such election and the amount thereof elected to be so applied, and plus (Z) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment (excluding any returns in excess of the amount originally invested) pursuant to clause (X); provided provided, that if any Investment pursuant to this Section 6.04(j) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Partyprovisions thereof) and not in reliance on this Section 6.04(j);
(k79) Investments constituting Permitted Acquisitions so long as immediately after giving effect to such Permitted Acquisition, the Net Total Leverage Ratio on a Pro Forma Basis would not exceed 4.00 to 1.00; provided that no Event of Default shall have occurred and be continuing; provided, further, that, if immediately after giving effect to such Investment, the Net Total Leverage Ratio on a Pro Forma Basis exceeds 1.75 to 1.00, the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent change in value) of Permitted Acquisitions of Subsidiaries that are not Subsidiary Loan Parties or of assets that are not owned by Subsidiary Loan Parties shall not exceed $65,000,000Business Acquisitions;
(l) intercompany loans between Subsidiaries that are not Loan Parties and Guarantees by Subsidiaries that are not Loan Parties permitted by Section 6.01(m);
(m80) Investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business or consistent with past practice or Investments acquired by the Borrower or a Subsidiary as a result of a foreclosure by the Borrower or any of the Subsidiaries with respect to any secured Investments or other transfer of title with respect to any secured Investment in default;
(n81) Investments of a Subsidiary acquired after the Closing Date or of a person merged into the Borrower or merged into or consolidated with a Subsidiary after the Closing Date, in each case, (i) to the extent such acquisition, merger merger, amalgamation or consolidation is permitted under this Section 6.04, (ii) in the case of any acquisition, merger merger, amalgamation or consolidation, in accordance with Section 6.05 and (iii) to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger merger, amalgamation or consolidation and were in existence on the date of such acquisition, merger merger, amalgamation or consolidation;
(o82) acquisitions by the Borrower of obligations of one or more officers or other employees of the Borrower or its Subsidiaries in connection with such officer’s or employee’s acquisition of Equity Interests of the Borrower, so long as no cash is actually advanced by the Borrower or any of the Subsidiaries to such officers or employees in connection with the acquisition of any such obligations;
(p83) Guarantees by the Borrower or any Subsidiary of operating leases (other than Capitalized Lease Obligations) or of other obligations that do not constitute IndebtednessIndebtedness of the kind described in clauses (b), (e), (f), (g), (h), (i), (j) or (k) of the definition thereof, in each case entered into by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practicebusiness;
(q84) Investments to the extent that payment for such Investments is made with Qualified Equity Interests of the Borrower;
(r) Investments in the Equity Interests of one or more newly formed persons that are received in consideration of the contribution by the Borrower or the applicable Subsidiary of assets (including Equity Interests and cash) to such person or persons; provided, that (i) the fair market value issuance of such assets, determined Equity Interests are not included in good faith by the Borrower, so contributed pursuant to this clause (r) shall not in the aggregate exceed $10,000,000 and (ii) in respect of each such contribution, a Responsible Officer any determination of the Borrower shall certify, in a form to be agreed upon by the Borrower and the Administrative Agent (x) immediately after giving effect to such contribution, no Default or Event of Default shall have occurred and be continuing or would result therefrom, (y) the fair market value (as determined in good faith by the Borrower) of the assets so contributed and (z) that the requirements of clause (i) of this proviso remain satisfiedAvailable Amount;
(s) Investments consisting of Restricted Payments permitted under Section 6.06;
(t85) Investments in the ordinary course of business or consistent with past practice consisting of Uniform Commercial Code Article 3 endorsements for collection or deposit and Uniform Commercial Code Article 4 customary trade arrangements with customers;
(u86) [reserved];
non-cash Investments made in connection with tax planning and reorganization activities so long as, after giving effect thereto, the security interest of the Lenders in the Collateral, taken as a whole, is not materially impaired (v) Guarantees permitted under Section 6.01 (except to as determined by the extent such Guarantee is expressly subject to this Section 6.04Borrower in good faith);
(w87) advances in the form of a prepayment of expenses, so long as such expenses are being paid in accordance with customary trade terms of the Borrower or such Subsidiary;
(x88) Investments by the Borrower and its the Subsidiaries, including loans to any direct or indirect parent of the Borrower, if the Borrower or any other Subsidiary would otherwise be permitted to make a Restricted Payment under Section 6.06(g) in such amount (provided, that the amount of any such Investment shall also be deemed to be a Restricted Payment under the appropriate clause of Section 6.06 6.06(g) for all purposes of this Agreement);
(y89) Investments consisting of Securitization transfers of Permitted Receivables Facility Assets or arising as a result of Permitted Securitization FinancingsQualified Receivables Facilities;
(z90) loans Investments consisting of the licensing or advances contribution of Intellectual Property pursuant to members representing their deferred initiation deposits joint marketing or fees, arising in the ordinary course of business or consistent other similar arrangements with past practiceother persons;
(aa91) to the extent constituting Investments, purchases and acquisitions of inventory, supplies, materials and equipment or purchases of contract rights or licenses or leases of Intellectual Property in each case in the ordinary course of business or consistent with past practice;business; and
(bb92) [reserved];
(cc) Investments in joint ventures; provided that the aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) of Investments made after the Closing Date pursuant to this Section 6.04(cc) shall not exceed the greater of $40,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, that if any Investment pursuant to this Section 6.04(cc) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(cc);
(dd) [reserved];
(ee) Investments in any Unrestricted Subsidiaries after giving effect to the applicable additional Investments, in an aggregate outstanding amount (valued at the time of the making thereof, and without giving effect to any subsequent changes in value) not to exceed $15,000,000; provided, that if any Investment pursuant to this Section 6.04(ee) is made in any person that was not a Subsidiary on the date on which such Investment was made but becomes a Subsidiary thereafter, then such Investment may, at the option of the Borrower, upon such person becoming a Subsidiary and so long as such person remains a Subsidiary, be deemed to have been made pursuant to Section 6.04(b) (to the extent permitted by the proviso thereto in the case of any Subsidiary that is not a Loan Party) and not in reliance on this Section 6.04(ee);
(ff) any Investment so long as, at the time any such Investment is made and immediately after giving effect to such Investmentthereto, (x) no Default or Event of Default shall have occurred and is continuing and (y) the First Lien Secured Net Total Leverage Ratio on a Pro Forma Basis would is not exceed 1.75 greater than 3.75 to 1.00; provided that no Event . For purposes of Default shall have occurred determining compliance with this Section 6.04, (A) an Investment need not be permitted solely by reference to one category of permitted Investments (or any portion thereof) described in Sections 6.04(a) through (x) but may be permitted in part under any relevant combination thereof and be continuing;
(gg) [reserved]; and
(hh) Investments made (iB) in connection with the exercise event that an Investment (or any portion thereof) meets the criteria of one or more of the categories of permitted Investments (or any subscriptionsportion thereof) described in Sections 6.04(a) through (x), optionsthe Borrower may, warrantsin its sole discretion, callsdivide, puts classify or other rights reclassify such Investment (or commitments pursuant to agreements set forth on Schedule 3.08(b) or (iiany portion thereof) in satisfaction any manner that complies with this Section 6.04 and will be entitled to only include the amount and type of obligations under joint venture agreements existing on the Closing Date. The amount of Investments that may be made at such Investment (or any time pursuant to the proviso portion thereof) in Section 6.04(bone or more (as relevant) or Section 6.04(j) (such Sections, the “Related Sections”) may, at the election of the Borrower, be increased by the amount of Investments that could be made at above clauses (or any portion thereof) and such time under the other Related Section; provided, that the amount of each such increase in respect of one Related Section Investment (or any portion thereof) shall be treated as having been used made or existing pursuant to only such clause or clauses (or any portion thereof); provided, that all Investments described in Schedule 6.04 shall be deemed outstanding under the other Related SectionSection 6.04(b) or Section 6.04(h), as applicable. Any Investment in any person other than the Borrower or a Subsidiary Loan Party Guarantor that is otherwise permitted by this Section 6.04 may be made through intermediate Investments in Subsidiaries that are not Loan Parties and such intermediate Investments shall be disregarded for purposes of determining the outstanding amount of Investments pursuant to any clause set forth above. The amount of any Investment made other than in the form of cash or cash equivalents shall be the fair market value thereof, which shall be determined in good faith by the Borrower and may be determined either, at the option of the Borrower, Fair Market Value thereof valued at the time of such Investment or as of the date of the definitive agreement with respect to such Investmentmaking thereof, and without giving effect to any subsequent change in value. The amount of any Investment outstanding at any time shall be the original cost of such Investment, reduced by any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments, income and similar amounts) actually received in respect of any such Investment. For purposes of determining compliance with this covenant, an Investment need not be permitted solely by reference to one category of permitted Investments (write-downs or any portion thereof) described in Section 6.04(a) through (hh) but may be permitted in part under any combination write-offs thereof.
Appears in 1 contract
