Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, make or pay, directly or indirectly, any Restricted Payment, except: (i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c)); (ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person; (iii) [reserved]; (iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants; (v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date; (vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings: (A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries; (B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment; (C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries; (D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12; (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement; (F) [reserved]; (G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07; (vii) [reserved]; (viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby; (ix) [reserved]; (x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms; (xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration; (xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes; (xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests); (xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and (xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000. (b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except: (i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof; (ii) Permitted Refinancing of Indebtedness to the extent permitted by Section 6.01; (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent; (iv) [reserved]; (v) [reserved]; (vi) [reserved]; (vii) [reserved]; and (viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii).
Appears in 1 contract
Samples: Credit Agreement (Pluralsight, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The No Borrower will, nor will not, and will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary the Borrowers may make Restricted Payments declare and pay dividends with respect to their common stock payable solely in additional shares of its common stock and in cash to the Borrower or any other Restricted Subsidiary; provided that extent after giving effect thereto the Borrowers will remain in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowercompliance with Section 7.12, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower Subsidiaries may declare and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued pay dividends ratably with respect to any such their Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The No Borrower will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) with the prior written consent of the Administrative Agent, payment of Indebtedness permitted by Section 7.01 with the proceeds of the issuance of Equity Interests;
(iii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the Indebtedness (subject to any subordination provisions thereofagreements);
(iiiv) Permitted Refinancing prepayment of Indebtedness permitted by Section 7.01 provided that (A) no Default or Event of Default has occurred and is continuing; (B) the making of such prepayment will not result in the occurrence of a Default or Event of Default after giving effect thereto; and (C) except as to prepayment of the Indebtedness permitted by Section 7.01(l), the Administrative Agent has given its prior written consent, which consent shall not be unreasonably withheld;
(v) refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];7.01; and
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payment of Junior Financing owed to secured Indebtedness that becomes due as a result of the Borrower voluntary sale or a Restricted Subsidiary transfer of the property or the prepayment of Permitted Refinancing of assets securing such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Indebtedness.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary Holdings may make Restricted Payments declare and pay dividends with respect to the Borrower or any other Restricted Subsidiary; provided that its capital stock payable solely in the case additional shares of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))its common stock;
(ii) Subsidiaries of the Borrower may declare and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Personpay dividends ratably with respect to their capital stock;
(iiiA) [reserved]Holdings and the Borrower may make the Restricted Payments contemplated by and permitted under Section 6.04(a), and (B) Holdings may make Restricted Payments consisting of the issuance of the Company's Notes pursuant to the Stockholders' Agreement, so long as, in each instance under either of (A) or (B), above, each and every one of the Restricted Transaction Conditions shall have been satisfied immediately prior and after giving effect thereto;
(iv) non-the Borrower may pay to Holdings on the Third Restatement Effective Date, a cash repurchases dividend in the amount required to redeem the Holdings Preferred Stock on such date and, thereafter, at such times and in such amounts as shall be necessary, after giving effect to the application by Holdings of Equity Interests in Holdings any other cash resources available to it (or any direct or indirect parent of Holdingsincluding Permitted Investments), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;permit Holdings to:
(vA) so long as if at the time thereof and after giving effect thereto no Event of Default has occurred and is continuing or would immediately result therefromcontinuing, Restricted Payments pay taxes imposed upon it and liabilities incidental to Holdingsits existence when due,
(B) if at the time thereof and after giving effect thereto no Default has occurred and is continuing, which pay directors' fees to its directors and actual operating expenses when due, provided that dividends paid to Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests for the purpose of paying directors' fees and actual operating expenses shall not exceed $500,000 in any fiscal year,
(or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity InterestsC) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred be made by Holdings to finance the redemptionthat are permitted by clause (iii) above, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interestsand (v), held directly or indirectly below, and
(D) expenditures to fund the development of certain tracking technology transferred to Holdings by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower on or before the Third Restatement Effective Date so long as, on a cumulative basis during the period commencing on and its Restricted Subsidiariesafter the Third Restatement Effective Date, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after expenditures do no exceed an amount equal to $4,000,000, minus the Effective Date shall not exceed $5,000,000 principal amount of all Indebtedness guaranteed by Holdings permitted by Section 6.04(m), above. so long as, in each instance under either of (C) and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds D), above, each and every one of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries Transaction Conditions shall have been satisfied immediately prior and after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash giving effect thereto; provided that any dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required permitted to be paid by the direct or indirect parent of to Holdings on its taxable income attributable shall not be paid prior to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by date that Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) will apply the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only such dividends to the extent any purposes for which such Restricted Payments in respect of any direct or indirect parent of Holdings dividends are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;permitted; and
(Cv) the proceeds of which shall be used by on and after December 31, 2005, Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings purchase the Xxxxxx Warrants, or stock issued pursuant thereto, pursuant to (a) pay cash in lieu of an obligation or right to do so under and pursuant to the issuance of fractional Equity Interests in connection with any dividendXxxxxx Warrants Agreement, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) so long as (A) without duplication both of any the Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions Transaction Conditions shall have been satisfied immediately prior and after giving effect thereto and (B) without duplication the Leverage Ratio as of any the end of the fiscal quarter most recently ended, adjusted to give effect to such purchase is not greater than the Restricted Payments made pursuant to Transaction Leverage Ratio. By way of example and not limitation, if Section 6.07(a)(vi)(A)(ii)6.12 requires that, any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with as of the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason last day of any early termination of any such agreement or otherwise, the fiscal quarter ending immediately prior to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence date of such acceleration;
(xii) payments made or expected to be made by Holdingspurchase, the Borrower or any Leverage Ratio not exceed 6.75 to 1, the Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion Transaction Leverage Ratio as of the exercise price date of such options purchase would not be met by the Borrower unless, as of said last day of said immediately preceding fiscal quarter, the Leverage Ratio (adjusted to give effect to such purchase) is equal to or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other less than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments 6.25 to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,0001.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;; and
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment or any other repurchase, redemption or repayment of Junior Financing owed the June 2004 Notes to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; providedextent permitted by Section 6.14, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)below.
Appears in 1 contract
Samples: Credit Agreement (Argo Tech Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Unless either the Leverage Test or the Ratings Test shall be satisfied at such time and would remain satisfied after giving effect to such payment or distribution, the Borrower will not, and will not permit any Restricted Subsidiary of the Subsidiaries to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Subsidiaries may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary declare and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued pay dividends ratably with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdingscapital stock, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct no Default or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or at the time of such payment and no Default would occur as a result therefromof making such payment, additional (A) the Borrower may make Restricted Payments to the extent that the aggregate amount of all such Restricted Payments in an the current fiscal quarter, taken together with the aggregate amount of all such Restricted Payments in respect of such Restricted Payments in the three fiscal quarters immediately preceding such fiscal quarter, is not in excess of $100,000,000 plus 25% of Adjusted Consolidated Net Income for the four fiscal quarter period ending most recently prior to the time any such Restricted Payment is made and (B) the Borrower may pay regular dividends or distributions in respect of preferred stock issued after the date hereof, and (iii) notwithstanding the limitation in subsection (ii) above, so long as no Default or Event of Default shall have occurred and be continuing at the time of a repurchase and no Default or Event of Default would occur as a result of making that repurchase, the Borrower may repurchase its capital stock to the extent that the aggregate amount since August 4, 2004, of all such payments in respect of such repurchases shall not exceed $3,000,000500,000,000, in addition to any repurchases allowed under subsection (ii) above. For purposes of clause (ii) above, “Adjusted Consolidated Net Income” for any period shall mean the sum, without duplication, for such period of Consolidated Net Income plus any special one-time or extraordinary non-cash charges deducted in calculating such Consolidated Net Income.
(b) The Unless either the Leverage Test or the Ratings Test shall be satisfied at such time and would remain satisfied upon making such payment or distribution, the Borrower will not, and will not permit any Restricted Subsidiary of its Subsidiaries to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest payments and scheduled or mandatory principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing subordinated debt prohibited by the subordination provisions thereof, and payments made to the Borrower or any Subsidiary by Securitization Entities in respect of subordinated Indebtedness incurred pursuant to any Securitization;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]repayments of Indebtedness of acquired Persons or businesses in connection with and substantially simultaneously with the consummation of Permitted Acquisitions or Permitted Other Acquisitions;
(v) [reserved];payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and
(vi) [reserved];
the conversion of 5% Convertible Subordinated Notes issued by Amerisource Health Corporation (viinow known as AmerisourceBergen Services Corporation) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary due December 1, 2007 to, or the prepayment of Permitted Refinancing exchange of such Indebtedness with Notes for, common stock of the proceeds Borrower, or the redemption of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party such Notes for cash pursuant to this clause a notice of redemption given at a time when no Default or Event of Default shall have occurred and be continuing (viiior would occur as a result of the redemption of all such Notes for cash).
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Allied Waste will not, and nor will not it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make declare or make, or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingRestricted Payment, or incur any payment obligation (contingent or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreementotherwise) that has a substantially similar effect to any of the foregoingdo so, except:
(i) payment of regularly scheduled interest Allied Waste may declare and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, pay dividends with respect to such Junior Financing, other than payments its capital stock payable solely in respect additional shares of any Junior Financing prohibited by the subordination provisions thereofits capital stock;
(ii) Permitted Refinancing Restricted Subsidiaries of Indebtedness the Borrower may declare and pay dividends ratably with respect to the extent permitted by Section 6.01their capital stock;
(iii) Allied Waste may make Restricted Payments, not exceeding an aggregate amount of $25,000,000 during any fiscal year, pursuant to and in accordance with the conversion stock option plans or other benefit plans or in connection with incentive or compensation arrangements for current or former management or employees of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of the Borrower and its direct or indirect parentRestricted Subsidiaries;
(iv) [reserved]the Borrower or any Restricted Subsidiary may declare and make dividend payments to Allied Waste solely to the extent necessary for Allied Waste to pay for taxes and to pay administrative expenses to conduct its business in accordance with Sections 5.01(b) and 6.10;
(v) [reserved]Allied Waste may declare and pay dividends in respect of the Sponsor Preferred Stock payable solely in additional shares of Sponsor Preferred Stock (or other capital stock, as provided therein) and at any time after June 30, 2004, the Borrower or any Restricted Subsidiary may pay cash dividends to Allied Waste in an aggregate cumulative amount of not more than $75,000,000 in order to permit Allied Waste to pay cash dividends on the Sponsor Preferred Stock (including on shares theretofore paid as dividends thereon in accordance with this clause (v)) and Allied Waste may use such dividends to pay cash dividends not exceeding an aggregate amount of $75,000,000 on such Sponsor Preferred Stock; provided in each case that no Default or Event of Default has occurred and is then continuing;
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a any Restricted Subsidiary or may pay cash dividends to Allied Waste in order to permit Allied Waste to pay cash dividends on the prepayment of Permitted Refinancing of Sponsor Preferred Stock (including on shares theretofore paid as dividends thereon in accordance with clause (v) hereof) and Allied Waste may use such Indebtedness with dividends to pay cash dividends on the proceeds of any other Junior FinancingSponsor Preferred Stock; provided, thathowever, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to all cash dividend payments in accordance with this clause (viii).vi) are subject to the satisfaction of the following additional conditions on the date of such dividend payment and after giving effect thereto:
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Each Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (icontingent or otherwise) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerdo so, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) except so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing (or would shall result therefromfrom the payment thereof), additional (i) Restricted Subsidiaries may declare and pay dividends ratably with respect to their capital stock, (ii) FCX may pay regularly scheduled quarterly dividends in respect of its preferred stock issued and outstanding on the Effective Date and effect regularly scheduled mandatory redemptions of its preferred stock issued and outstanding on the Effective Date, in each case, to the extent and in the amounts required by the prospectus under which such preferred stock was issued and (iii) FCX may make (A) Restricted Payments in an amount cash in any amounts to the extent that, immediately after giving effect thereto (and giving pro forma effect to the payment of such cash), Liquidity is not less than $250,000,000 and (B) Restricted Payments in cash not otherwise permitted by clause (A), including Restricted Payments made when Liquidity is less than $250,000,000 and Restricted Payments that cause Liquidity to exceed decrease below $3,000,000250,000,000; provided that no Restricted Payments shall be made pursuant to this clause (B) if, immediately after giving effect thereto (and to any expenditure of cash required thereby), the Restricted Uses would be greater than the Restricted Uses Basket.
(b) The Each Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities (other than common stock of FCX) or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities (other than common stock of FCX) or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent6.01(a);
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment prepayments of Junior Financing Indebtedness owed to either Borrower by the other Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any a Restricted Subsidiary by another Restricted Subsidiary, provided that prepayments of Indebtedness owed to a Restricted Subsidiary that is not a Loan Party pursuant shall be permitted only to the extent no Default has occurred and is continuing at the time of such prepayment; and
(vi) payments of Indebtedness that are not permitted by clauses (i)-(v) of this Section 6.08(b) (I) if immediately prior to and after giving effect to such payment of Indebtedness (and giving pro forma effect to any payment of cash in connection with such payment of Indebtedness), Liquidity is not less than $250,000,000 or (II) if the condition described in clause (viii)I) shall not be satisfied, if and to the extent that after giving effect to any such payments, the Restricted Uses would not be greater than the Restricted Uses Basket.
(c) Each Borrower will not, and will not permit any Restricted Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement.
Appears in 1 contract
Samples: Credit Agreement (Freeport McMoran Copper & Gold Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Borrower may make Restricted Payments declare and pay dividends with respect to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of payable solely in additional Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
Interests, (ii) the Borrower Subsidiaries may declare and each Restricted Subsidiary may make dividend payments pay dividends or other distributions payable solely in the Equity Interests (other than Disqualified ratably with respect to their Equity Interests) of such Person;
, (iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as there exists no Default or Event of Default, the Borrowers may make Restricted Payments, not exceeding $2,000,000 during any fiscal year, pursuant to and in accordance with Equity Interest option plans or other benefit plans for management or employees of the Borrowers and their Subsidiaries, (iv) so long as there exists no Default or Event of Default has occurred and the Company is continuing a "flow through" or would immediately result therefrom"disregarded" entity for United States federal income tax purposes, Restricted Payments to Holdings, which Holdings the Company may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (pay dividends or make Restricted Payments distributions to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, its members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with not greater than the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause necessary for such members (v) not to exceed $1,000,000 in or, if any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on member is a "flow through" or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely "disregarded" entity for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. United States federal income Tax tax purposes, any the members of such member) to pay their actual state and United States federal, state and local income Taxes required to be paid tax liabilities in respect of income earned by the direct or indirect parent of Holdings on its taxable income attributable Borrowers, and (v) the Company shall be permitted to the Borrower pay dividends and its Subsidiaries for any taxable yeardistributions; provided, that such dividends and distribution shall only be permitted if (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation there exists no Default or individual, whichever is higher, whose sole asset is its indirect interest in BorrowerEvent of Default, (2) taking into account the character Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such dividend and distribution) would 120 not be less than 1.25 to 1 for the most recently completed twelve month period assuming that for purposes of income or gain calculating the Fixed Charge Coverage Ratio for such period (calculated on a pro forma basis in a manner acceptable to the Administrative Agent) such dividends and any allowable federal income tax deduction for state and local taxesdistributions occurred on the first day of such applicable period, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, immediately after giving effect to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwisedividends and distributions and for the next succeeding twelve month period, Availability will not be less than $40,000,000 on a pro forma basis (calculated in a manner acceptable to the extent such amount exceeds Administrative Agent and assuming all past due accounts payable of the amount that would Borrowers have been payable under such tax receivable agreement paid in full in cash at the absence time of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payment and no accounts payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of Borrowers are allowed to become past due during such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Intereststwelve month period thereafter);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent6.1;
(iv) [reserved];payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment repayments or repurchases of Junior Financing owed to Senior Notes after the Borrower or occurrence of a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior FinancingQualified Public Offering; provided, thatthat (1) immediately after giving effect to such repayment or repurchase and for the next succeeding twelve month period, Availability will not be less than $40,000,000 on a pro forma basis (calculated in a manner acceptable to the Administrative Agent and assuming all past due accounts payable of the Borrowers have been paid in full in cash at the time of such payment and no Loan Party shall make any prepayment accounts payable of Junior Financing owed the Borrowers are allowed to any Restricted Subsidiary become past due during such twelve month period thereafter), and (2) the Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such repayment or repurchase) would not be less than 1.25 to 1 for the most recently completed twelve month period assuming that is not for purposes of calculating the Fixed Charge Coverage Ratio for such period (calculated on a Loan Party pursuant pro forma basis in a manner acceptable to this clause (viii)the Administrative Agent) such repayment or repurchase occurred on the first day of such applicable period.
Appears in 1 contract
Samples: Credit Agreement (Stewart & Stevenson Funding Corp.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary of the Subsidiaries to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary of the Borrower may make Restricted Payments to the Borrower or Borrower, and to any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary Subsidiaries of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed Borrower that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))are Guarantors;
(ii) each Non-Guarantor Subsidiary of the Borrower may make Restricted Payments to any Excluded Subsidiary of the Borrower;
(iii) the Borrower and each Restricted other Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases payments by Borrower to repurchase or redeem qualified capital stock of Equity Interests in Holdings the Borrower held by officers, directors or employees or former officers, directors or employees (or any direct their transferees, estates or indirect parent beneficiaries under their estates) of Holdings), the Borrower or any Restricted Subsidiary deemed to occur of its Subsidiaries, upon exercise their death, disability, retirement, severance or termination of stock options employment or warrants if service; provided, that the aggregate cash consideration paid for all such Equity Interests represent a portion of the exercise price payable redemptions and repurchases shall not exceed, in connection with the exercise of such options or warrantsany Fiscal Year, $3,000,000;
(v) so long as if at the time thereof and immediately after giving effect thereto no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments the repurchase, redemption or other acquisition or retirement of Equity Interests deemed to occur upon the exercise or exchange of options, warrants or other similar rights to the extent such Equity Interests represent a portion of the exercise or exchange price of those options, warrants or other similar rights, and the repurchase, redemption or other acquisition or retirement of Equity Interests made in an amount lieu of withholding taxes resulting from the exercise or exchange of options, warrants or similar rights; provided that the aggregate cash consideration paid for all such repurchases, redemptions or acquisitions shall not to exceed exceed, in any Fiscal Year, $3,000,000.; and
(vi) the Borrower and its Subsidiaries may make Permitted Restricted Payments;
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingSubsidiaries to, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination agreements with respect to, or subordination terms of, any Indebtedness, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by Indebtedness arising under the subordination provisions thereofLoan Documents;
(ii) Permitted Refinancing prepayments of Indebtedness owed to the extent permitted by Section 6.01;any Loan Party; and
(iii) if at the conversion time thereof and immediately after giving effect thereto no Default or Event of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) Default shall have occurred and be continuing or would result therefrom, prepayments of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)permitted under Section 6.01.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (icontingent or otherwise) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests do so (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party the Borrower and the Restricted Subsidiaries shall be deemed permitted to utilize agree to pay or make a Restricted Payment, or incur any obligation (contingent or otherwise) to do so, so long as the actual payment or making of such Restricted Payment is contingent upon (x) receipt of the consent therefor (via a waiver or amendment to this Section 6.08(a)) from the requisite number of Lenders in accordance with Section 9.02 or (y) the Commitments having expired or been terminated and the principal of and interest on a dollar for dollar basis each Loan and all fees, expenses and other amounts payable (other than contingent amounts not yet due) under any Loan Document having been paid in full and all Letters of Credit having expired or been terminated (or otherwise having become subject to cash collateralization or other arrangements reasonably satisfactory to the basket for Investments by Loan Parties Administrative Agent and the Issuing Bank (including in non-Loan Parties under Section 6.04(crespect of fees that would otherwise be payable in connection with such Letters of Credit pursuant to the terms of this Agreement), and the Issuing Bank having released the Revolving Lenders from their participation obligations with respect to all such Letters of Credit) and all LC Disbursements having been reimbursed), except:
(i) the Restricted Subsidiaries may declare and pay dividends and make other distributions ratably with respect to their Equity Interests;
(ii) the Borrower may declare and each Restricted Subsidiary may pay dividends or make dividend payments or other distributions with respect to its Equity Interests payable solely in the Equity Interests (other than Disqualified shares of Qualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases the Borrower may make Restricted Payments for the repurchase, retirement or other acquisition or retirement for value of Equity Interests in Holdings (Interests, or options or rights to acquire Equity Interests, of the Borrower held by any direct future, present or indirect parent former employee, director or consultant of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments Subsidiaries pursuant to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock management equity plan or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement plan or any other employment agreements management or equity holders’ agreement in an aggregate amount together with employee benefit plan or agreement; provided, however, that the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by made under this clause (viii) shall not to exceed $1,000,000 in any calendar year of the Borrower $3,000,000 (with unused amounts in any calendar year being carried over to succeeding calendar years; , provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date carried-over amounts shall not exceed $5,000,000 10,000,000 in the aggregate for the term of this Agreement);
(iv) concurrently with any issuance of Qualified Equity Interests, the Borrower may redeem, purchase or retire any Equity Interests of the Borrower using the proceeds of, or convert or exchange any Equity Interests of the Borrower for, such Qualified Equity Interests;
(v) the Borrower may pay the merger consideration contemplated under the Investment Agreement in respect of the Acquisition (regardless of when paid) and (B) such amount in any calendar year may be increased by an amount not adjust the exercise price of options and the number of shares subject to exceed the cash proceeds of key man life insurance policies received restricted stock units as contemplated by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective DateInvestment Agreement;
(vi) the Borrower and its or any Restricted Subsidiaries Subsidiary may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof (it being understood, for purposes of clarity, that (1) the payment of cash in lieu of fractional Equity Interests as consideration and (2) payments to dissenting stockholders pursuant to applicable law, in each case in connection with a Permitted Acquisition or any Permitted Acquisition other acquisition by the Borrower or a Restricted Subsidiary permitted hereunder shall not constitute a Restricted Payment prohibited by this Section), (B) receive or other similar Investment) accept the return to the Borrower or any Restricted Subsidiary of Equity Interests of the Borrower or any Restricted Subsidiary constituting a portion of the purchase price consideration in settlement of indemnification claims and (bC) honor any make payments in the form of Qualified Equity Interests of the Borrower in connection with the conversion request by a holder of convertible Indebtedness and Equity Interests permitted to be issued hereunder (provided that, in connection with any such conversion, the Borrower may make cash payments in lieu of fractional shares Equity Interests in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its termsconversion);
(xivii) to the extent constituting Restricted Payments, the Borrower and the Restricted Subsidiaries may enter into and consummate transactions expressly permitted under Section 6.03 (A) without duplication other than any such transaction that involves a Person that is not a wholly-owned Subsidiary of the Borrower immediately prior to such transaction), provided that any Restricted Payment made pursuant to this clause (Bvii) below, may be made only to the Borrower or to a Restricted Payments Subsidiary that is a wholly-owned Subsidiary of the Borrower, in good faith, determines are reasonably necessary to effectuate ;
(viii) the IPO Reorganization Transactions and (B) without duplication of Borrower may make any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into Payment in connection with an with an “up-C” IPO by any IPO Shell Company entered into the form of Qualified Equity Interests in connection with the IPO Reorganization Transactionsconversion of Series B Preferred Stock or any other convertible securities, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, in each case permitted to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such accelerationbe issued hereunder;
(xiiix) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any may make repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants warrants;
(x) the Borrower may make any Restricted Payment made in connection with the withholding of Equity Interests of the Borrower or other withholdings to allow any future, present or former employee, director or consultant of the Borrower or any Restricted Subsidiary to meet his or her tax withholding obligations that arise in connection with an award pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement;
(xi) so long as no Default has occurred and is continuing or would result therefrom, the Borrower may make additional Restricted Payments in an aggregate amount not to exceed the sum of (A) $10,000,000 (less (x) the aggregate amount of prepayments or repayments of Indebtedness made pursuant to clause (iv)(A) of Section 6.08(b) and (y) the aggregate amount of payments made pursuant to clause (xiii)(B) of this Section 6.08(a)) and (B) the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied so long as immediately after giving effect to such Restricted Payment (including the incurrence of any Indebtedness in connection therewith), the Total Leverage Ratio shall not be greater than 2.00 to 1.00 and the Borrower shall have delivered to the Administrative Agent a certificate of its Financial Officer to such effect, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with the Total Leverage Ratio test set forth in this clause (which calculations shall, if made as of the last day of any fiscal quarter of the Borrower for which the Borrower has not delivered to the Administrative Agent the financial statements and certificate of a Financial Officer required withholding to be delivered by Section 5.01(a) or similar taxes(b) and Section 5.01(c), respectively, be accompanied by a reasonably detailed calculation of Consolidated EBITDA for the relevant period);
(xii) the Borrower may effect the certificate of designation in respect of the Series B Preferred Stock (it being understood and agreed that this clause (xii) shall not permit the Borrower to make any Restricted Payments under such certificate of designation or otherwise in respect of the Series B Preferred Stock);
(xiii) the distributionBorrower may (A) issue non-cash rights to the extent distributed in connection with any stockholder rights plan of the Borrower and (B) purchase, by dividend repurchase or otherwiseotherwise acquire for value any non-cash rights distributed in connection with any stockholder rights plan of the Borrower, provided that the aggregate amount of shares payments made pursuant to this clause (xiii)(B) shall not exceed $500,000 for the term of Equity Interests (other than Disqualified Equity Interests);this Agreement; and
(xiv) the declaration Borrower may accrue dividends in respect of its Series A Preferred Stock and payment of Restricted Payment on Holdings’ or Series B Preferred Stock (it being understood and agreed that this clause (xiv) shall not permit the Borrower’s common stock (or the payment of Restricted Payments Borrower to make any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000respect of such Series A Preferred Stock or Series B Preferred Stock, as the case may be).
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness under any Subordinated Debt Document or any other Indebtedness required to be subordinated to the Obligations pursuant to the terms hereof, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financingsuch Indebtedness, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing (it being understood and agreed that (1) in determining whether any payment by the Borrower or a Restricted Subsidiary would qualify as a payment that has a substantially similar effect to any of the foregoing, the Borrower shall be permitted to consult with the Administrative Agent prior to the making of any such payment and request that the Administrative Agent make a determination as to whether such payment would be deemed to be restricted by this Section 6.08(b), and the good faith determination of the Administrative Agent in that regard shall be definitive and (2) the Borrower and the Restricted Subsidiaries shall be permitted to agree to pay or make any such payment or other distribution so long as the actual payment or making of such payment or distribution is contingent upon (x) receipt of the consent therefor (via a waiver or amendment to this Section 6.08(b)) from the requisite number of Lenders in accordance with Section 9.02 or (y) the Commitments having expired or been terminated and the principal of and interest on each Loan and all fees, expenses and other amounts payable (other than contingent amounts not yet due) under any Loan Document having been paid in full and all Letters of Credit having expired or been terminated (or otherwise having become subject to cash collateralization or other arrangements reasonably satisfactory to the Administrative Agent and the Issuing Bank (including in respect of fees that would otherwise be payable in connection with such Letters of Credit pursuant to the terms of this Agreement), and the Issuing Bank having released the Revolving Lenders from their participation obligations with respect to all such Letters of Credit) and all LC Disbursements having been reimbursed), except:
(i) payment of regularly scheduled interest and principal payments(or accreted value, mandatory offers to repayif applicable) payments as, repurchase or redeem, mandatory prepayments in the form of principal premium payment and interest, and payment when due in respect of fees, expenses and indemnification obligations, with respect to any such Junior FinancingIndebtedness, other than payments in respect of any Junior Financing such Indebtedness prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing refinancings of any such Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion consummation of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe Existing Indebtedness Refinancing;
(iv) [reserved]so long as no Default has occurred and is continuing, repayments or prepayments of any such Indebtedness in an aggregate amount not to exceed the sum of (A) $10,000,000 (less (x) the aggregate amount of Restricted Payments made pursuant to clause (xi)(A) of Section 6.08(a) and (y) the aggregate amount of payments made pursuant to clause (xiii)(B) of Section 6.08(a)) and (B) the amount of Cumulative Excess Cash Flow that is Not Otherwise Applied so long as immediately after giving effect to such repayment or prepayment (including the incurrence of any Indebtedness in connection therewith), the Total Leverage Ratio shall not be greater than 2.00 to 1.00 and the Borrower shall have delivered to the Administrative Agent a certificate of its Financial Officer to such effect, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with the Total Leverage Ratio test set forth in this clause (which calculations shall, if made as of the last day of any fiscal quarter of the Borrower for which the Borrower has not delivered to the Administrative Agent the financial statements and certificate of a Financial Officer required to be delivered by Section 5.01(a) or (b) and Section 5.01(c), respectively, be accompanied by a reasonably detailed calculation of Consolidated EBITDA for the relevant period);
(v) [reserved];payments of Indebtedness permitted under Section 6.01(a)(iii), except to the extent that any such payments are prohibited by the subordination provisions thereof; and
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payments in the form of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness Qualified Equity Interests in connection with the proceeds conversion of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed convertible Indebtedness permitted to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)be incurred hereunder.
Appears in 1 contract
Samples: Credit Agreement (Palm Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Such Borrower will not, and nor will not it permit any of its Restricted Subsidiary Subsidiaries to, make declare or paymake, directly or indirectly, any Restricted Payment, except:
(i) each such Borrower and its Restricted Subsidiary Subsidiaries may make Restricted Payments declare and pay dividends with respect to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests payable solely in additional shares of such Restricted Subsidiary based on their relative ownership interests of the relevant class of its Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))Interests;
(ii) the Borrower Restricted Subsidiaries may declare and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified pay dividends ratably with respect to their Equity Interests) of such Person;
(iii) [reserved];to the extent constituting Restricted Payments, the Parent Borrower and its Restricted Subsidiaries may enter into transactions expressly permitted by Sections 6.03, 6.05 or 6.09; CREDIT AGREEMENT, Page 97
(iv) non-cash repurchases by Parent Borrower of partial interests in its Equity Interests for nominal amounts which are required to be repurchased in Holdings (or any direct or indirect parent of Holdings), connection with the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such to permit the issuance of only whole shares of Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrantsInterests;
(v) so long as no Event the Parent Borrower may pay for the repurchase, retirement or other acquisition or retirement for value of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests of the Parent Borrower (or any options, warrants, restricted stock or including related stock appreciation rights or similar securities issued with respect to securities) held by any such Equity Interests) future, present or to service Indebtedness incurred by Holdings to finance former director, officer, member of management, employee or consultant of the redemption, acquisition, retirement, repurchase Parent Borrower or settlement any of such Equity Interest its Subsidiaries (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administratorsestate, heirs, legatees family members, spouse or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment former spouse of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with of the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar yearsforegoing); provided that (A) at the time of any such repurchase, retirement or other acquisition or retirement for value no Default exists or would result, (B) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall under this clause (v) in any fiscal year does not exceed (x) $5,000,000 3,000,000 (the “Yearly Limit”) plus (y) the portion of the Yearly Limit from each of the immediately preceding four fiscal years (not including any fiscal year ending prior to 2010) which was not expended by Parent Borrower for Restricted Payments in such fiscal years (the “Carryover Amount” and in calculating the Carryover Amount for any fiscal year, the Yearly Limit applicable to the previous fiscal years shall be deemed to have been utilized first by any Restricted Payments made under this clause (Bv) in such amount in any calendar year may be increased by fiscal year) plus (z) an amount not equal to exceed the cash proceeds from the sale of key man life insurance policies received by Equity Interests to directors, officers, members of management, employees or consultants of the Parent Borrower or of its Subsidiaries (or by Holdings and contributed to the Borrowerestate, heirs, family members, spouse or former spouse of any of the foregoing) or the Restricted Subsidiaries after the Effective Datein such fiscal year;
(vi) the repurchase of Equity Interests of the Parent Borrower that occurs upon the cashless exercise of stock options, warrants or other convertible securities as a result of the Parent Borrower accepting such options or warrants as satisfaction of the exercise price of such Equity Interests;
(vii) such Borrower and its Subsidiaries may make any Restricted Payment in connection with the Rothsay Acquisition as contemplated by the Rothsay Acquisition Agreement;
(viii) repurchase of Equity Interests deemed to occur upon the non-cash exercise of Equity Interests to pay taxes;
(ix) the Parent Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
an aggregate amount that, together with (A) cash dividends or the aggregate amount of all other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid Restricted Payments made by the direct or indirect parent of Holdings on its taxable income attributable to the Parent Borrower and its Restricted Subsidiaries for any taxable yearpursuant to this Section 6.08(a)(ix) after the date hereof, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds aggregate amount of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims all Investments made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Parent Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable Subsidiaries pursuant to any investor management agreement entered into with the Sponsor on or Section 6.04(y)(i) after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred date hereof and be continuing or would result from such payment;
(C) the proceeds aggregate amount of which shall be used all payments or distributions made by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Parent Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made Restricted Subsidiaries pursuant to Section 6.046.08(b)(v) after the date hereof, shall not exceed the Available Amount; provided that as of the date of any such Restricted Payment and after giving effect thereto no Default shall exist or result therefrom; and
(x) the Parent Borrower may make additional Restricted Payments; provided that (A) such Restricted Payment no Default shall be made substantially concurrently with the closing of such Investment exist or result therefrom and (B) Holdings shall, immediately following if the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) Total Leverage Ratio on a Pro Forma Basis as of the end of the most recent fiscal quarter for which financial statements were required to be contributed to the Borrower or a Subsidiary Loan Party delivered under Section 5.01(a) or (2b) is greater than 2.25 to 1.00, then the Person formed or acquired to merge into or consolidate with the Borrower or any aggregate amount of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by made under this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
clause (x) in respect of a fiscal year (including the Borrower may make Restricted Payments to allow Holdings to (aPayment in question) pay cash in lieu of the issuance of fractional Equity Interests in connection with shall not at any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) time exceed (A) without duplication 25% of any the Consolidated Net Income of the Parent Borrower and its Restricted Payment made pursuant to clause Subsidiaries for the immediately preceding fiscal year minus (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication amount of any Restricted Payments Investments made pursuant to Section 6.07(a)(vi)(A)(ii6.04(y)(ii) during such fiscal year (which amount shall not be less than zero), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Such Borrower will not, and nor will not it permit any of its Restricted Subsidiary Subsidiaries to, make or agree to pay or makeany payment, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal any purchase, redemption, retirement, acquisition, cancellation or termination of any Subordinated Indebtedness or any Indebtedness issued in lieu of or interest representing a refinancing or replacement of any Indebtedness in respect of the Pari Passu Notes outstanding on any Junior Financingthe Effective Date (but, for the avoidance of doubt not the Pari Passu Notes existing on the Effective Date themselves) (such Indebtedness, collectively, “Restricted Indebtedness”), or any other payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, Restricted Indebtedness or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
(i) payment refinancings of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Restricted Indebtedness to the extent permitted by Section 6.01;
(iiiii) (A) any payment or other distribution in respect of principal or interest on, or payment or other distribution on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in each case in exchange for, or out of the net proceeds of, the substantially concurrent sale of Equity Interests (other than Disqualified Equity Interests and so long as no Change of Control would result therefrom) of the Parent Borrower, or (B) the conversion of any Junior Financing Restricted Indebtedness to Equity Interests (other than Disqualified Equity Interests).
(iii) payments or other distributions in respect of Holdings the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, in an aggregate amount not to exceed $25,000,000; provided that (x) at the time of any such payment or other distribution, no Default shall have occurred and be continuing or would result therefrom and (y) at the time of its direct such payment or indirect parentother distribution and after giving effect thereto and to any borrowing in connection therewith, the Parent Borrower is in compliance, on a pro forma basis, with the Financial Covenants;
(iv) [reserved]payments or other distributions in respect of principal or interest on, or payment or other distribution on account of the purchase, redemption, retirement, acquisition, cancellation or termination of, Restricted Indebtedness, if on a Pro Forma Basis the Secured Leverage Ratio as of the end of the most recent fiscal quarter for which financial statements were required to be delivered under Section 5.01(a) or (b) is less than the greater of (A) 2.75 to 1.00 and (B) 0.50 to 1.00 less than the applicable Secured Leverage Ratio under the Financial Covenants for the most recently ended fiscal quarter for which financial statements have been delivered at the time of such payment or other distribution, and in each case, the Parent Borrower has delivered to the Administrative Agent a certificate of a Financial Officer, together with all relevant financial information reasonably requested by the Administrative Agent demonstrating compliance with this clause (iv);
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payments or other distributions in respect of Junior Financing owed to the Borrower purchase, redemption, retirement, acquisition, cancellation or a termination of, Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; providedIndebtedness, in an aggregate amount that, no Loan Party shall make any prepayment together with (A) the aggregate amount of Junior Financing owed to any all other such payments or other distributions made by the Parent Borrower and its Restricted Subsidiary that is not a Loan Party Subsidiaries pursuant to this clause Section 6.08(b)(v) after the date hereof, (viii)B) the aggregate amount of all other Restricted Payments made by the Parent Borrower and its Restricted Subsidiaries pursuant to Section 6.08(a)(ix) after the date hereof and (C) the aggregate amount of all Investments made by the Parent Borrower and its Restricted Subsidiaries pursuant to Section 6.04(y)(i) after the date hereof, shall not exceed the Available Amount; provided that as of the date of any such payments or distribution and after giving effect thereto no Default shall exist or result therefrom. Notwithstanding the foregoing, the making of any dividend, payment or other distribution or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend, payment or other distribution or giving of the redemption notice, as applicable, will not be prohibited if, at the date of declaration or notice such dividend, payment or other distribution or redemption would have complied with the terms of this Agreement.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, declare or make or pay, directly or indirectly, any Restricted Payment, except:
(i) each Holdings or any Restricted Subsidiary may declare and pay Restricted Payments with respect to its Equity Interests payable solely in additional shares or units of its Equity Interests;
(ii) Subsidiaries may declare and pay Restricted Payments ratably with respect to their Equity Interests and may make Restricted Payments to the Borrower Holdings or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such PersonSubsidiaries;
(iii) [reserved]Subsidiaries may declare and pay dividends or make distributions (including pursuant to a tax sharing agreement or similar arrangement) to the extent necessary to permit Holdings or any other Loan Party to pay any federal, state, local or foreign Taxes of a consolidated, combined, unitary or similar Tax group of which Holdings is the common parent to the extent such dividends or distributions do not exceed the amount Holdings and its Subsidiaries would have paid as a stand-alone group; provided that payments with respect to any Taxes attributable to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid with respect to such period by such Unrestricted Subsidiary to Holdings or its Restricted Subsidiaries for the purposes of paying such Taxes;
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants[Reserved];
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or Restricted Subsidiary may make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds greater of key man life insurance policies received by (A) $25,000,000 and (B) 1.25% of Consolidated Total Assets of Holdings (measured as of the Borrower (or by Holdings and contributed date such Restricted Payment is made based upon the financial statements most recently delivered pursuant to the BorrowerSection 5.01(a) or the Restricted Subsidiaries after the Effective DateSection 5.01(b));
(vi) the Borrower and its Holdings or any Restricted Subsidiaries Subsidiary may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings as, both immediately before and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings after giving effect (including on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1a Pro Forma Basis) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parentRestricted Payments, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries Payment Conditions shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07satisfied;
(vii) [reserved];
(viii) redemptions in whole Holdings or in part any Restricted Subsidiary may make Restricted Payments to pay for the repurchase, retirement or other acquisition or retirement for value of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ixStock) [reserved];
(x) the Borrower may make Restricted Payments to allow of Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests held by any future, present or former employee, director, officer, manager or consultant (of Holdings, any of its Subsidiaries, or their respective controlled Affiliates estates or the beneficiaries of such estates, pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided that, the aggregate Restricted Payments made under this clause (vii) do not exceed in any fiscal year $5,000,000 (with unused amounts in any fiscal year being carried over to succeeding fiscal years and net of any proceeds received by Holdings and contributed to Holdings after the Effective Date in connection with resales of any common stock or common stock options purchased pursuant to this clause (vii)) plus all net cash proceeds obtained from any key-man life insurance policies received by Holdings after the Effective Date;
(viii) Holdings may convert Equity Interests of Holdings into other Equity Interests of Holdings and in connection therewith may make distributions to its holders in lieu of issuing any fractional Equity Interests;
(ix) to the extent constituting Restricted Payments, Holdings and its Restricted Subsidiaries may make Investments or consummate transactions permitted transfereesby Section 6.01, Section 6.03 or Section 6.04, respectively and may consummate the Transactions;
(x) Holdings and its Restricted Subsidiaries may make the payment of any repurchases dividend or distribution on account of Equity Interests or the consummation of any redemption within sixty (60) days after the date of declaration of the dividend or distribution on account of Equity Interests or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend, distribution or redemption payment would have complied with the provisions of this Section 6.07; and
(xi) Holdings and its Restricted Subsidiaries may repurchase Equity Interests deemed to occur upon the exercise of stock options options, warrants, convertible notes or warrants if similar rights to the extent such Equity Interests represent a portion of the exercise price of such options or those stock options, warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (rights or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000related withholding taxes.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) prepayment of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property)Indebtedness for borrowed money, including any sinking fund or similar deposit, on account of the purchaseearly repurchase, redemption, retirement, acquisition, cancellation or termination of any Junior FinancingIndebtedness for borrowed money (other than any intercompany Indebtedness owed to or by Holdings or any Restricted Subsidiary) that (i) by its terms is subordinated in right of payment to the Secured Obligations, (ii) secured on a junior lien basis by Liens on the Collateral (excluding for the avoidance of doubt, the Term Loan Obligations), or any other payment (including any payment under any Swap Agreementiii) that has a substantially similar effect to any of the foregoing, unsecured except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness;
(ii) Permitted Refinancing of Indebtedness Refinancings to the extent permitted by Section 6.01;
(iii) payments of secured Indebtedness that becomes due as a result of an Event of Loss or the conversion sale or transfer of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings the property or any of its direct or indirect parentassets securing such Indebtedness;
(iv) [reserved]payments made in connection with the consummation of the Transactions;
(v) [reserved]so long as no Event of Default has occurred and is continuing or would result therefrom, other payments not exceeding in the aggregate the greater of (A) $25,000,000 and (B) 1.25% of Consolidated Total Assets of Holdings (measured as of the date such payment is made based upon the financial statements most recently delivered pursuant to Section 5.01(a) or Section 5.01(b));
(vi) [reserved]Holdings or any Restricted Subsidiary may make payments in respect of Indebtedness if the Payment Conditions shall be satisfied with respect to such payments;
(vii) [reserved]any payment of Indebtedness incurred in reliance on Section 6.01(n) if such Indebtedness is issued into escrow pending completion of any such Permitted Acquisition or Investment, in connection with the termination of escrow and redemption of such Indebtedness pursuant to the terms thereof; and
(viii) prepayment of Junior Financing owed to the Borrower payments made by converting or a Restricted Subsidiary or the prepayment of Permitted Refinancing of exchanging any such Indebtedness with the proceeds to Equity Interests of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Holdings.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Loan Parties will not, and will not permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted the Loan Parties may declare and pay dividends with respect to their equity interests to any Loan Party which is a Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is of the Borrowers whether or not a Wholly Owned Subsidiary Default or Event of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))Default exists;
(ii) as long as no Default or Event of Default exists and is continuing, the Borrower and each Restricted Subsidiary Loan Parties may make dividend payments or distributions to the Lead Borrower to the extent necessary to pay indemnities, accounting, legal and other distributions payable solely in professional fees, and other similar general and administrative expenses incurred by the Equity Interests (other than Disqualified Equity Interests) of such PersonLead Borrower for itself and the Loan Parties;
(iii) [reserved];the Loan Parties may make distributions to the Lead Borrower to the extent necessary to pay corporate taxes incurred by the Lead Borrower for itself and the Loan Parties; and
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Exit Facility Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Lead Borrower and may repurchase its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date outstanding common stock in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings25,000,000, so long as PROVIDED THAT no Default or Event of Default specified shall exist or shall result after giving effect thereto and FURTHER PROVIDED THAT (A) Excess Availability (after satisfaction of the requirements set forth in Section 7.01(a)7.11 herein) shall be in an amount greater than or equal to $50,000,000 both before and after giving effect thereto, (b)B) the Lead Borrower delivers to the Agents an officers' certificate which certifies that the Lead Borrower is solvent both before and after giving effect thereto, (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds Fixed Charge Coverage Ratio for the period of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses four (including franchise Taxes (but not including income or similar Taxes4) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related consecutive fiscal quarters most recently ended prior to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used such repurchase is greater than 1.10 to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,0001.00.
(b) The Borrower Loan Parties will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, cash securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payments due from time to time hereunder;
(ii) prior to the Exit Facility Date, actions required to be made pursuant to an order of the Bankruptcy Court for adequate protection pursuant to the Bankruptcy Code;
(iii) prior to the Exit Facility Date, payment of pre-petition claims authorized by the First Day Orders or other orders entered in the Reorganization Cases, in each case to which the Agents have consented;
(iv) payment of the Indebtedness of the Borrowers incurred in connection with the Existing Credit Agreement;
(v) payments contemplated by the Bankruptcy Plan;
(vi) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness to the extent permitted by under Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];7.1; and
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed prior to the Borrower Exit Facility Date, payment of reclamation claims authorized by the First Day Orders or a Restricted Subsidiary or other orders entered in the prepayment of Permitted Refinancing of such Indebtedness with Reorganization Cases and to which the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Agents have consented.
Appears in 1 contract
Samples: Debt Agreement (Footstar Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Unless either the Leverage Test or the Ratings Test shall be satisfied at such time and would remain satisfied after giving effect to such payment or distribution, the Parent will not, and will not permit any Restricted Subsidiary of the Subsidiaries to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Subsidiaries may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary declare and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued pay dividends ratably with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdingscapital stock, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct no Default or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or at the time of such payment and no Default would occur as a result therefromof making such payment, additional (A) the Parent may make Restricted Payments to the extent that the aggregate amount of all such Restricted Payments in an the current fiscal quarter, taken together with the aggregate amount of all such Restricted Payments in respect of such Restricted Payments in the three fiscal quarters immediately preceding such fiscal quarter, is not in excess of $100,000,000 plus 25% of Adjusted Consolidated Net Income for the four fiscal quarter period ending most recently prior to the time any such Restricted Payment is made and (B) the Parent may pay regular dividends or distributions in respect of preferred stock issued after the date hereof, and (iii) notwithstanding the limitation in subsection (ii) above, so long as no Default or Event of Default shall have occurred and be continuing at the time of a repurchase and no Default or Event of Default would occur as a result of making that repurchase, the Parent may repurchase its capital stock to the extent that the aggregate amount since August 4, 2004, of all such payments in respect of such repurchases shall not exceed $3,000,000500,000,000, in addition to any repurchases allowed under subsection (ii) above. For purposes of clause (ii) above, “Adjusted Consolidated Net Income” for any period shall mean the sum, without duplication, for such period of Consolidated Net Income plus any special one-time or extraordinary non-cash charges deducted in calculating such Consolidated Net Income.
(b) The Unless either the Leverage Test or the Ratings Test shall be satisfied at such time and would remain satisfied upon making such payment or distribution, the Borrower and the Parent will not, and will not permit any Restricted Subsidiary of their respective Subsidiaries to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest payments and scheduled or mandatory principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing subordinated debt prohibited by the subordination provisions thereof, and payments made to the Parent or any Subsidiary by Securitization Entities in respect of subordinated Indebtedness incurred pursuant to any Securitization;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];repayments of Indebtedness of acquired Persons or businesses in connection with and substantially simultaneously with the consummation of Permitted Acquisitions or Permitted Other Acquisitions; and
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payment of Junior Financing owed to secured Indebtedness that becomes due as a result of the Borrower voluntary sale or a Restricted Subsidiary transfer of the property or the prepayment of Permitted Refinancing of assets securing such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Indebtedness.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent, CCI and the Borrower will not, and nor will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Parent may declare and pay dividends with respect to its Capital Stock payable solely in additional shares of its common stock or Non-Cash Pay Preferred Stock, (ii) Restricted Subsidiary Subsidiaries (other than the Borrower and CCI) may declare and pay dividends and make distributions ratably with respect to any Class of their Capital Stock, (iii) the Parent may make Restricted Payments Payments, pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of the Borrower or any other Parent and the Restricted Subsidiary; provided that Subsidiaries, in an aggregate amount not in excess of (A) Equity Proceeds and Conversion Proceeds received after the case date hereof and within 90 days of any such Restricted Payment by a Restricted Subsidiary that is and not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made applied to any other Designated Equity Proceeds Use plus (B) to the Borrowerextent not made with such Equity Proceeds or Conversion Proceeds, $2,000,000 during any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
fiscal year, (iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing exists or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Parent may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower pay regular required cash dividends on New Preferred Stock and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing exists or would result therefrom, additional Restricted Payments the Borrower may pay cash dividends to CCI, and CCI may pay cash dividends to the Parent, at such times and in an amount not such amounts as may be necessary to exceed $3,000,000permit the Parent to make payment of regular required cash dividends on New Preferred Stock and the Parent and CCI to service their Indebtedness permitted hereunder and pay their other liabilities incurred in the ordinary course of business.
(b) The Parent, CCI and the Borrower will not, and nor will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on 101 96 any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing subordinated debt prohibited by the subordination provisions thereof, provided that any payment of interest accruing under the ATX Note shall be made only with common stock of the Parent;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent6.01 and 6.02;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the casualty, condemnation, voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]payment of Indebtedness with Equity Proceeds received after the date hereof and within 90 days of such payment and not applied to any other Designated Equity Proceeds Use;
(vi) [reserved];payment of intercompany Indebtedness among the Loan Parties; and
(vii) [reserved]; and
payment of Indebtedness under Hedging Agreements in connection with the termination (viiiincluding early termination) prepayment of Junior Financing owed to such Hedging Agreements by the Parent, the Borrower or a Restricted Subsidiary in the ordinary course of business.
(c) The Parent, CCI and the Borrower will not, nor will they permit any Restricted Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interest, the payments required to be made by the Parent, CCI, the Borrower or the prepayment Restricted Subsidiaries thereunder are limited to amounts permitted to be paid as Restricted Payments under paragraph (a) of Permitted Refinancing this Section 6.09, (ii) in the case of such any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by the Parent, CCI, the Borrower or the Restricted Subsidiaries 102 97 thereunder are limited to the amount permitted under paragraph (b) of this Section 6.09 and (iii) in the case of any Synthetic Purchase Agreement, the obligations of the Parent, CCI, the Borrower and the Restricted Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Administrative Agent.
(d) The Parent, CCI and the Borrower will not, nor will they permit any Restricted Subsidiary to, make any payment of Indebtedness under the Senior Unsecured Facility other than with Equity Proceeds or the proceeds of a Permitted Parent Financing.
(e) Unless there is no outstanding Indebtedness under the Senior Unsecured Facility at such time, the Parent and the Borrower will prepay all Indebtedness under the ATX Note not later than the date that is 270 days prior to the stated maturity of the ATX Note.
(f) Promptly after receiving any Net Proceeds from borrowings under the Senior Unsecured Facility or from any other Junior component of the Initial Permitted Financing; provided, that, no Loan Party the Parent and CCI shall make any prepayment either contribute such Net Proceeds to the common equity of Junior Financing owed the Borrower and/or loan such Net Proceeds to any Restricted Subsidiary that is not the Borrower on a Loan Party subordinated basis evidenced by a promissory note pledged pursuant to this clause (viii)the Pledge Agreement.
Appears in 1 contract
Samples: Credit Agreement (Corecomm LTD /De/)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will notdeclare or make, and will not permit any Restricted Subsidiary to, make or payagree to declare or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made Borrowers and its Subsidiaries may declare and pay dividends with respect to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions its Stock payable solely in the Equity Interests additional Stock (other than Disqualified Equity InterestsStock) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and there exists no Event of Default, the Borrower are treated as flow-through entities may pay dividends or make distributions to its equity holders in an aggregate amount not greater than the amount necessary for U.S. federal income Tax purposes, any such equity holders to pay the highest marginal effective rate of federal, state and local income Taxes required to be paid tax liabilities in respect of income earned by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for after deducting any taxable yearunused prior losses of the Borrower and its Subsidiaries since the Effective Date. By way of example, (1) calculated by multiplying such income by if in the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account period from the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, Effective Date to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items end of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings2017, the Borrower and its subsidiaries have operating losses of $1,000,000, during 2018 the Borrower and its subsidiaries have operating losses of $5,000,000 and during 2019 the Borrower and its subsidiaries have an operating income of $10,000,000, no Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable Payments would be permitted pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdingsforegoing clause (a)(ii) for 2017 and 2018, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable Restricted Payments permitted pursuant to the operations or ownership foregoing clause (a)(ii) for 2019 would be limited to equity holders’ actual state and U.S. federal income tax liabilities in respect of $4,000,000 of income earned by the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower No Loan Party will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness permitted under Section 6.01, other than payments in respect of any Junior Financing the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];commencing with May 15, 2020, on May 15 of each year, distributions or other restricted payments in the amount of all Excess Cash Flow that is not required to be applied to repay Term Loans pursuant to Section 2.08(c); and
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payment of Junior Financing owed secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the Borrower extent such sale or a Restricted Subsidiary or transfer is permitted by the prepayment terms of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Section 6.05.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and will not permit any Restricted of the Subsidiary Loan Parties to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary may make Restricted Payments , to the Borrower or any other Restricted Subsidiary; provided extent that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefromtherefrom (other than any Restricted Payment permitted under (iv) below to consummate the Public Tender Offer, Restricted Payments with respect to Holdings, which Holdings the condition of the absence of a Default shall not apply):
(i) the Borrower may use declare and pay dividends with respect to redeem, acquire, retire, repurchase or settle its Equity Interests payable solely in additional Equity Interests of the same class;
(or any options, warrants, restricted stock or stock appreciation rights or similar securities issued ii) Subsidiary Loan Parties may declare and pay dividends ratably with respect to any such their Equity Interests;
(iii) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or Borrower may make Restricted Payments Payments, not exceeding $500,000 during any fiscal year, pursuant to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends plans or other distributions on the stock of the Borrower to Holdings paid and declared solely benefit plans for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise management or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership employees of the Borrower and its Subsidiaries;; and
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(xiv) the Borrower may make Restricted Payments in cash consisting of repurchases or redemptions of shares of the Borrower's common stock (including the Public Tender Offer and the Private Repurchase) in an aggregate amount on and after the Effective Date, determined at the time of each such Restricted Payment, not to allow Holdings to exceed: (a) pay cash in lieu of $200,000,000 if the issuance of fractional Equity Interests in connection with Total Leverage Ratio, measured prior to giving effect to such Restricted Payment and any dividendIndebtedness incurred to finance such Restricted Payment, split or combination thereof the Pro Forma Total Leverage Ratio, measured after giving effect to such Restricted Payment and any Indebtedness incurred to finance such Restricted Payment, is greater than or any Permitted Acquisition (or other similar Investment) and equal to 6.50 to 1.00, (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any $300,000,000 if the Total Leverage Ratio, measured prior to giving effect to such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant and any Indebtedness incurred to clause (B) belowfinance such Restricted Payment, and the Pro Forma Total Leverage Ratio, measured after giving effect to such Restricted Payments that the BorrowerPayment and any Indebtedness incurred to finance such Restricted Payment is less than 6.50 to 1.00 but greater than or equal to 4.50 to 1.00, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (Bc) without duplication of any an unlimited amount, if the Total Leverage Ratio, measured prior to giving effect to such Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) Payment and any repurchases of Equity Interests deemed Indebtedness incurred to occur upon exercise of stock options finance such Restricted Payment, or warrants if the Pro Forma Total Leverage Ratio, measured after giving effect to such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of and any Indebtedness incurred to finance such Restricted Payments Payment is less than 4.50 to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,0001.00.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary Loan Party to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment or prepayment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited Indebtedness permitted by the subordination provisions thereofSection 6.01;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;; and
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payment of Junior Financing owed to secured Indebtedness that becomes due as a result of the Borrower voluntary sale or a Restricted Subsidiary transfer of the property or the prepayment of Permitted Refinancing of assets securing such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Indebtedness.
Appears in 1 contract
Samples: Credit Agreement (Cumulus Media Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares of its common stock or Qualified Preferred Stock, (ii) Subsidiaries (other than those directly owned, in whole or part, by the Borrower) may declare and pay dividends ratably with respect to their common stock, (iii) the Borrower may declare and pay cash dividends with respect to its common stock and effect repurchases, redemptions or other Restricted Subsidiary Payments with respect to its common stock, together in an aggregate amount in any fiscal year of the Borrower not to exceed 50% of Consolidated Net Income (if positive) for the immediately preceding fiscal year of the Borrower; provided that immediately prior and after giving effect to any such payment no Default or Event of Default shall have occurred and be continuing and, immediately after giving effect to any such payment, the Borrower shall have Revolver Availability of more than $100,000,000, (iv) the Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any fiscal year of the Borrower with respect to the Series E Preferred Stock, Series I Preferred Stock or any other Qualified Preferred Stock; provided that (x) immediately prior and after giving effect to any such payment, no Default or Event of Default shall have occurred and be continuing and (y) only so long as a Financial Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended on or prior to the date of such payment, calculated on a pro forma basis as if such payment were made on the last day of such period (and excluding any such payments previously made pursuant to this clause during such four quarter period but attributed for purposes of this calculation to the last day of a prior period which day does not occur in such four quarter period) is not less than the ratio applicable to such period of four fiscal quarters under Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments consisting of the repurchase or other acquisition of shares of, or options to purchase shares of, capital stock of the Borrower or any of its Subsidiaries from employees, former employees, directors or former directors of the Borrower or any Subsidiary (or their permitted transferees), in each case pursuant to stock option plans, stock plans, employment agreements or other Restricted Subsidiaryemployee benefit plans approved by the board of directors of the Borrower; provided that in no Default has occurred and is continuing; and provided further that the case aggregate amount of such Restricted Payments made after the Original Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay cash dividends to the Borrower; provided that the Borrower shall, within a reasonable time following receipt of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary payment, use all of the Borrower, such Restricted Payment is made proceeds thereof for a purpose set forth in Section 5.10(b) (including the payment of dividends required or permitted pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under this Section 6.04(c6.08(a));
, (iivii) the Borrower and each Restricted Subsidiary the Subsidiaries may make dividend payments or other distributions payable solely in declare and pay cash dividends with respect to the Equity Interests (other than Disqualified Equity Interestsset forth on Schedule 6.08(a) to the extent, and only to the extent, required pursuant to the terms of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of or any other agreement in effect on the exercise price payable in connection with the exercise of such options or warrants;
Effective Date and (vviii) so long as no Default or Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Borrower may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire redeem or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members shares of the Board of Directors or employees Borrower's and/or its Subsidiaries' (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributeesincluding Rite Aid Lease Management Company's) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that Preferred Stock (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies solely with Net Cash Proceeds received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries from issuances of its common stock after the Original Restatement Effective Date;
, provided that any such repurchase or redemption is effected within 150 days after the receipt of such proceeds or (viB) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or with other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable funds available to the Borrower and its Subsidiaries for any taxable yearif, (1) calculated by multiplying such income by the maximum combined tax rate applicable immediately after giving effect to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct redemption or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdingsrepurchase, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds Revolver Availability of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other more than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000100,000,000.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment payments or prepayments of Indebtedness created under the Senior Loan Documents;
(ii) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness permitted pursuant to Section 6.01(a);
(iiiii) Permitted Refinancing (A) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(v) or (vi) with the proceeds of Indebtedness permitted pursuant to Section 6.01(a)(v) or (vi) and (B) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(vii) with the proceeds of Indebtedness permitted pursuant to Section 6.01(a)(vii);
(iv) payments of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) provided no Default has occurred and is continuing or would result therefrom, Optional Debt Repurchases of Inside Indebtedness and, to the extent permitted by Section 6.01;
paragraph (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interestsc) of Holdings or any this Section, Optional Debt Repurchases of its direct or indirect parent;
(iv) [reserved];
(v) [reserved]Outside Indebtedness;
(vi) [reserved]repurchases, exchanges or redemptions of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified Preferred Stock;
(vii) [reserved]prepayments of Capital Lease Obligations in connection with the sale, closing or relocation of Stores;
(viii) prepayments of Indebtedness in connection with the incurrence of Refinancing Indebtedness permitted pursuant to Section 6.01(a)(ii) or (viii); and
(viiiix) prepayment prepayments of Junior Financing owed Indebtedness permitted pursuant to Section 6.01(a)(iii), if permitted by the subordination provisions applicable to such Indebtedness; and
(x) unless an Event of Default shall have occurred and be continuing, mandatory prepayments of Indebtedness and interest under the Jean Coutu Subordinated Notes (if required by the terms thereof as in xxxxct on the Second Restatement Effective Date), the New Notes and/or the Bridge Facility.
(c) The Borrower and the Subsidiaries will not effect Optional Debt Repurchases of Outside Indebtedness unless immediately prior and after giving effect to any such Optional Debt Repurchases, (x) no Default or Event of Default shall have occurred and be continuing and (y) the Borrower or a Restricted Subsidiary or the prepayment shall have Revolver Availability of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)more than $100,000,000.
Appears in 1 contract
Samples: Credit Agreement (Rite Aid Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will notNo Loan Party shall, and will not nor shall any Loan Party permit any Restricted Subsidiary of its Subsidiaries or the LS&Co. Trust to, make pay or paymake, directly or indirectly, any Restricted PaymentPayments, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdingsexcept that, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing at the time of any action described below or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
: (i) payment of regularly scheduled interest the U.S. Borrower may declare and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium pay dividends and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments distributions payable only in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity InterestsStock) of Holdings the U.S. Borrower, (ii) the U.S. Borrower may purchase Equity Interests from present or former employees, directors or other recipients (and their beneficiaries) of such Equity Interests under the U.S. Borrower’s incentive compensation plans and agreements as provided under such plans and agreements for aggregate consideration not to exceed $20.0 million in any twelve (12) Fiscal Month period, (iii) Restricted Payments to a U.S. Loan Party, (iv) Restricted Payments by any Foreign Subsidiary to any Canadian Loan Party and (v) Restricted Payments by any Foreign Subsidiary (other than a Canadian Loan Party) to any Foreign Subsidiary; provided that (i) the requirements of this Section 6.08(a) shall not apply to any Restricted Payment when the Payment Conditions with respect thereto are satisfied and the Loan Parties shall have delivered to the Administrative Agent either a certificate of a Financial Officer (with reasonably detailed calculations) certifying satisfaction of the Payment Conditions or other evidence of the same reasonably satisfactory to the Administrative Agent and (ii) no Default or Event of Default shall be deemed to have occurred if the Payment Conditions with respect to any Restricted Payment cease to be satisfied based solely on any Restricted Payments made when the Payment Conditions with respect thereto were satisfied.
(b) No Loan Party shall, nor shall any Loan Party permit any of its direct Subsidiaries or indirect parent;
the LS&Co. Trust to, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (collectively, a “prepayment”) any Indebtedness, except (i) the prepayment of the Loans in accordance with the terms of this Agreement, (ii) the prepayment of Indebtedness payable to a U.S. Loan Party, (iii) the prepayment of Indebtedness payable to a Canadian Loan Party by any Foreign Subsidiary, (iv) [reserved];
the prepayment of Indebtedness owed to any Foreign Subsidiary by any Foreign Subsidiary (other than a Canadian Loan Party), (v) [reserved];
the prepayment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of a permitted Disposition, (vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Indebtedness, in whole or in part, from the net cash proceeds of (or in exchange for) Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii).Indebtedness,
Appears in 1 contract
Samples: Credit Agreement (Levi Strauss & Co)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Loan Parties will not, and will not permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
except as long as no Default or Event of Default exists or would reasonably be expected to result therefrom (i) each Restricted the Subsidiaries of the Lead Borrower may declare and pay dividends with respect to their capital stock to any Loan Party which is a parent of such Subsidiary may make Restricted Payments (other than to the Borrower Rite Aid East Coast Subsidiaries) whether or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary Default or Event of the BorrowerDefault exists, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower Loan Parties may pay the Kmart Dividend to Kmart Corporation in each fiscal year to the extent legally required pursuant to the terms of the existing Kmart Agreement; provided (A) no Kmart-Related Default or Event of Default under Section 8.1(a) then exists, and each Restricted Subsidiary may make dividend payments or other distributions payable solely (B) such Kmart Dividend is legally declared and lawful under applicable law and is not declared until after March 20 in the Equity Interests (other than Disqualified Equity Interests) of such Person;
any fiscal year, and (iii) [reserved];
(iv) non-the Lead Borrower may declare and pay cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of dividends on its public common capital stock options or warrants if such Equity Interests represent and/or repurchase its public common capital stock and/or redeem preferred stock at a portion of the exercise $.01 purchase price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made per share pursuant to Section 6.04(l) the Shareholder Rights Plan in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; bona fide arms length transactions, provided that (A) the aggregate amount of all such Restricted Payments made on or after under this subsection (iii) will not exceed, in the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock aggregate, as of the Borrower incurrence of such payment or purchase, the sum of (1) $25,000,000 plus (2) 25% of Consolidated Net Income, after deducting payments to Holdings paid minority interests and declared solely for accruals relating thereto since the purpose of fundingClosing Date, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Lead Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by each fiscal quarter from the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account Closing Date through the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing date of such Investment payment or purchase; and (B) Holdings shallonly if both before and after giving effect to such Restricted Payment under this subsection (iii), immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which Excess Availability shall be used equal to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) greater than $40,000,000 on the proceeds date of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, and on a pro forma basis for the twelve-month period immediately succeeding such Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000Payment.
(b) The Borrower Loan Parties will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, cash securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
: (i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited Indebtedness to the extent such payments are permitted by the subordination provisions thereof;
Section 7.1; and (ii) Permitted Refinancing refinancings of Indebtedness described in clause (i), above, to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)7.1.
Appears in 1 contract
Samples: Credit Agreement (Footstar Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, declare or make or pay, directly or indirectly, any Restricted Payment, except:
(i) each the Borrower or any Restricted Subsidiary may declare and pay Restricted Payments with respect to its Equity Interests payable solely in additional shares or units of its Equity Interests;
(ii) Subsidiaries may declare and pay Restricted Payments ratably with respect to their Equity Interests and may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such PersonSubsidiaries;
(iii) [reserved]Subsidiaries may declare and pay dividends or make distributions (including pursuant to a tax sharing agreement or similar arrangement) to the extent necessary to permit the Borrower or any other Loan Party to pay any federal, state, local or foreign Taxes of a consolidated, combined, unitary or similar Tax group of which Borrower is the common parent to the extent such dividends or distributions do not exceed the amount the Borrower and its Subsidiaries would have paid as a stand-alone group; provided that payments with respect to any Taxes attributable to any Unrestricted Subsidiary for any taxable period shall be limited to the amount actually paid with respect to such period by such Unrestricted Subsidiary to the Borrower or its Restricted Subsidiaries for the purposes of paying such Taxes;
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed may make Restricted Payments if (A) on a Pro Forma Basis after giving effect to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of Restricted Payment, the exercise price payable in connection with Total Leverage Ratio does not exceed 2.75:1.00 and (B) at the exercise time of such options or warrantsRestricted Payment no Event of Default shall have occurred and be continuing;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (the Borrower or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or Restricted Subsidiary may make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds greater of key man life insurance policies received by (A) $25,000,000 and (B) 1.25% of Consolidated Total Assets of the Borrower (or by Holdings and contributed measured as of the date such Restricted Payment is made based upon the financial statements most recently delivered pursuant to the BorrowerSection 5.01(a) or the Restricted Subsidiaries after the Effective DateSection 5.01(b));
(vi) the Borrower and its or any Restricted Subsidiaries Subsidiary may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year the Available Amount at such time if (A) on a Pro Forma Basis after giving effect to such Restricted Payment, the Total Leverage Ratio does not exceed 3.50:1.00 and (B) at the time of Holdings, so long as such Restricted Payment no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07continuing;
(vii) [reserved];
(viii) redemptions in whole the Borrower or in part any Restricted Subsidiary may make Restricted Payments to pay for the repurchase, retirement or other acquisition or retirement for value of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ixStock) [reserved];
(x) of the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests held by any future, present or former employee, director, officer, manager or consultant (of the Borrower, any of its Subsidiaries, or their respective controlled Affiliates estates or the beneficiaries of such estates, pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement; provided that the aggregate Restricted Payments made under this clause (vii) do not exceed in any calendar year $5,000,000 (with unused amounts in any fiscal year being carried over to succeeding fiscal years and net of any proceeds received by Holdings and contributed to the Borrower after the Effective Date in connection with resales of any common stock or common stock options purchased pursuant to this clause (vii)) plus all net cash proceeds obtained from any key-man life insurance policies received by the Borrower after the Effective Date;
(viii) the Borrower may convert Equity Interests of the Borrower into other Equity Interests of the Borrower and in connection therewith may make distributions to its holders in lieu of issuing any fractional Equity Interests;
(ix) to the extent constituting Restricted Payments, the Borrower and its Restricted Subsidiaries may make Investments or consummate transactions permitted transfereesby Section 6.01, Section 6.03 or Section 6.04, respectively and may consummate the Transactions;
(x) the Borrower and its Restricted Subsidiaries may make the payment of any repurchases dividend or distribution on account of Equity Interests or the consummation of any redemption within 60 days after the date of declaration of the dividend or distribution on account of Equity Interests or giving of the redemption notice, as the case may be, if at the date of declaration or notice, the dividend, distribution or redemption payment would have complied with the provisions of this Section 6.07; and
(xi) the Borrower and its Restricted Subsidiaries may repurchase Equity Interests deemed to occur upon the exercise of stock options options, warrants, convertible notes or warrants if similar rights to the extent such Equity Interests represent a portion of the exercise price of such options or those stock options, warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (rights or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000related withholding taxes.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) prepayment of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property)Indebtedness for borrowed money, including any sinking fund or similar deposit, on account of the purchaseearly repurchase, redemption, retirement, acquisition, cancellation or termination of any Junior FinancingIndebtedness for borrowed money (other than any intercompany Indebtedness owed to or by the Borrower or any Restricted Subsidiary) that (i) by its terms is subordinated in right of payment to the Term Loan Obligations, (ii) secured on a junior lien basis by Liens on the Collateral (excluding for the avoidance of doubt, the ABL obligations), or any other payment (including any payment under any Swap Agreementiii) that has a substantially similar effect to any of the foregoing, unsecured except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness;
(ii) Permitted Refinancing of Indebtedness Refinancings to the extent permitted by Section 6.01;
(iii) payments of secured Indebtedness that becomes due as a result of an Event of Loss or the conversion sale or transfer of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings the property or any of its direct or indirect parentassets securing such Indebtedness;
(iv) [reserved]payments made in connection with the consummation of the Transactions;
(v) [reserved]so long as no Event of Default has occurred and is continuing or would result therefrom, other payments not exceeding in the aggregate the greater of (A) $25,000,000 and (B) 1.25% of Consolidated Total Assets of the Borrower (measured as of the date such payment is made based upon the financial statements most recently delivered pursuant to Section 5.01(a) or Section 5.01(b));
(vi) [reserved]the Borrower or any Restricted Subsidiary may make payments in respect of Indebtedness in an aggregate amount not to exceed the Available Amount at such time if (A) on a Pro Forma Basis after giving effect to such payment of Indebtedness, the Total Leverage Ratio does not exceed 3.50:1.00 and (B) at the time of such payment of Indebtedness no Event of Default shall have occurred and be continuing;
(vii) [reserved]any payment of Indebtedness incurred in reliance on Section 6.01(n)) if such Indebtedness is issued into escrow pending completion of any such Permitted Acquisition or Investment, in connection with the termination of escrow and redemption of such Indebtedness pursuant to the terms thereof; and
(viii) prepayment payments made by converting or exchanging any such Indebtedness to Equity Interests of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment any of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)its Parent Entities.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The None of BC Holdings or the BC Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingRestricted Payment, or incur any payment obligation (contingent or other distribution (whether in cashotherwise) to do so, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
except (i) payment Subsidiaries may declare and pay dividends or make distributions ratably with respect to their capital stock or membership interests, (ii) the BC Borrower may make Restricted Payments, not exceeding $5,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of regularly scheduled interest the BC Borrower and principal paymentsthe Subsidiaries, mandatory offers (iii) the BC Borrower may make distributions to repayBC Holdings at such times and in such amounts, repurchase not exceeding $5,000,000 during any fiscal year, as shall be necessary to permit BC Holdings to discharge its permitted liabilities, (iv) BC Holdings may redeem its Equity Interests and may make distributions to FPH so that FPH may make such redemptions of Equity Interests of FPH, in each case from former members of management, former employees, or redeem, mandatory prepayments former directors of principal premium and interestLoan Parties, and payment the BC Borrower may make distributions to BC Holdings as necessary to fund such redemptions, PROVIDED that the aggregate amount applied for all such purposes shall not exceed $3,000,000 during any fiscal year, (v) BC Holdings and the BC Borrower may pay (by distribution or otherwise) management fees to Madison Dearborn of feesup to $1,000,000 in the aggregate in any fiscal year, (vi) distributions by the BC Borrower to BC Holdings to pay directors' out-of-pocket expenses and indemnification obligationsobligations owing to directors, (vii) the BC Borrower may make distributions to BC Holdings, and BC Holdings may in turn make distributions to FPH, (A) not exceeding $500,000 in the aggregate during any fiscal year, at such times as shall be necessary to permit FPH to discharge its corporate maintenance obligations and (B) not exceeding $500,000 in the aggregate during any fiscal year, at such times as shall be necessary to permit FPH to discharge its obligations related to its portion of common expenses shared with respect BC Holdings or the BC Borrower, (viii) for so long as BC Holdings is a pass-through or disregarded entity for United States Federal income tax purposes, the BC Borrower may make distributions to such Junior FinancingBC Holdings, other than payments and BC Holdings shall in turn be permitted, to make Tax Distributions in respect of any Junior Financing prohibited by taxable year of BC Holdings equal to the subordination provisions thereof;
product of (iiA) Permitted Refinancing the amount of Indebtedness taxable income allocated to the Members for such taxable year, less the amount of taxable loss allocated to the Members for all prior taxable years (except to the extent permitted by Section 6.01;
such taxable losses have previously been taken into account under this provision), times (iiiB) the conversion highest aggregate marginal statutory Federal, state and local income tax rate (determined taking into account the deductibility of any Junior Financing state and local income taxes for Federal income tax purposes) to Equity Interests (other than Disqualified Equity Interests) of Holdings or which any of its the direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]Members of BC Holdings who is an individual is subject for such year; and
(viii) prepayment of Junior Financing owed and BC Holdings shall be permitted to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of make such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party Tax Distributions pursuant to this clause (viii) on a quarterly basis during such taxable year based on the best estimate of the chief financial officer of BC Holdings of the amounts specified in clauses (A) and (B) above; PROVIDED that if the aggregate amount of the estimated Tax Distributions made in any taxable year of BC Holdings exceeds the actual maximum amount of Tax Distributions for that year as finally determined, the amount of any Tax Distributions in the succeeding taxable year (or, if necessary, any subsequent taxable years) shall be reduced by the amount of such excess, (ix) after consummation of the Contemplated IPO, the BC Borrower and BC Holdings may declare or make, agree to pay or make, or incur obligations to make, Restricted Payments in cash; PROVIDED that (A) the aggregate amount of such Restricted Payments under this clause (ix) (including those made by the Holding Companies, the BC Borrower or the Timber Borrower under clause (xiii) of Section 6.08 of the First Restated Credit Agreement) plus the aggregate amount of cash consideration applied pursuant to clause (vii) of Section 6.08(b) shall not exceed the aggregate Net Proceeds received from the Contemplated IPO and (B) all such Restricted Payments under this clause (ix) must be made within 180 days after the date of consummation of the Contemplated IPO, (x) after consummation of the Contemplated IPO, BC Holdings may declare and pay dividends in cash, and the BC Borrower may make distributions to BC Holdings to fund such dividends; PROVIDED that (A) at the time of and after giving effect to any such dividend, no Default shall have occurred and be continuing, (B) subject to clause (C) below, at the time of and after giving effect to any such dividend, the aggregate amount of dividends paid in reliance upon this clause (x) since the First Restatement Effective Date shall not exceed an amount equal to the sum of (1) 50% of the Consolidated Net Income accrued during the period (treated as one accounting period) from the Original Effective Date to the end of the most recent fiscal quarter ending prior to the date of such dividend for which internal financial statements are available (or, in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit), plus (2) in the event of the occurrence of a Prepayment Event described in clause (c) of the definition of the term Prepayment Event, an amount equal to 50% of the Net Proceeds from such Prepayment Event and (C) dividends may be paid in reliance upon this clause (x) in an aggregate amount of up to $35,000,000 notwithstanding whether such dividends would be permitted by clause (B) above, but any such dividends paid in reliance upon this clause (C) shall be included in determining whether any dividends may be paid in reliance upon clause (B) above and (xi) after consummation of the Contemplated IPO, the BC Borrower may make distributions to BC Holdings, and BC Holdings may in turn make distributions to FPH at such times as shall be necessary to permit FPH to reimburse the expenses of Madison Dearborn incurred in connection with the consummation of the Contemplated IPO, but any such distributions shall be deducted in calculating Net Proceeds from the Contemplated IPO.
Appears in 1 contract
Samples: Amendment and Restatement Agreement (Boise Cascade Holdings, L.L.C.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will notNone of the Parent, and will not permit the Obligor or any other Restricted Subsidiary toshall make payments which are Restricted Payments, make or pay, directly or indirectly, any Restricted Payment, exceptother than:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or made by any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made Obligor in respect of its Equity Interests ratably to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests holders of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))Interests;
(ii) dividends paid by the Borrower and each Restricted Subsidiary may make dividend payments or other distributions Parent with respect to its Equity Interests payable solely in the additional Equity Interests (other than Disqualified Equity Interests) of such PersonPreferred Stock);
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any other Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar yearsPayments; provided that (A) the aggregate amount of all such Restricted Payments made on no Specified Default or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefromtherefrom and (B) at the time each such Restricted Payment is made, additional the aggregate amount of such Restricted Payment shall not exceed the Available Amount at such time (in each case, as certified by a Responsible Officer of the Obligor); and
(iv) other Restricted Payments; provided that (A) no Specified Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) at the time of and immediately after giving effect to any such Restricted Payment, the Total Adjusted Net Leverage Ratio shall not exceed the Specified Total Adjusted Net Leverage Ratio on a pro forma basis (in each case, as certified by a Responsible Officer of the Obligor);
(v) Restricted Payments at such times and in such amounts as shall be necessary to permit any Parent Entity or the Parent to pay any franchise and other similar Taxes required to maintain its corporate, legal and organizational existence associated with the Parent, the Obligor and its Subsidiaries; and
(vi) for any taxable period ending after the Refinancing Effective Date (a) for which the Obligor is treated as a partnership or disregarded entity for U.S. federal income tax purposes, the payment of distributions to the Obligor’s direct or indirect equity owners in an aggregate amount not equal to exceed $3,000,000.the product of (x)(1) the amount of taxable income allocated from or with respect to the Obligor and its Subsidiaries to the direct or indirect
(b) The Borrower will notNone of the Parent, and will not permit the Obligor or any other Restricted Subsidiary to, will make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation defeasance, cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing Indebtedness other than (A) such payments in respect of Subordinated Affiliate Indebtedness and (B) such payments in respect of Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing refinancings of Junior Indebtedness to with the extent proceeds of other Indebtedness permitted by under Section 6.016.02;
(iii) payments of secured Junior Indebtedness that becomes due as a result of the conversion voluntary sale or transfer of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe assets securing such Indebtedness in transactions permitted hereunder;
(iv) [reserved];payments of or in respect of Junior Indebtedness made solely with Equity Interests in the Parent (other than Preferred Stock); and
(v) [reserved];other payments of or in respect of Junior Indebtedness; provided that (A) no Specified Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) at the time each such payment is made, the aggregate amount of such payment shall not exceed the Available Amount at such time (in each case, as certified by a Responsible Officer of the Obligor); and
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment other payments of or in respect of Junior Financing owed to Indebtedness; provided that (A) no Specified Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) at the Borrower or a Restricted Subsidiary or the prepayment time of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed and immediately after giving effect to any Restricted Subsidiary that is such payment, the Total Adjusted Net Leverage Ratio shall not exceed the Specified Total Adjusted Net Leverage Ratio on a Loan Party pursuant to this clause pro forma basis (viiiin each case, as certified by a Responsible Officer of the Obligor).
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will notdeclare or make, and will not permit any Restricted Subsidiary to, make or payagree to pay or make, directly or indirectly, any Restricted Payment, except:except that
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower Any Loan Party or any Subsidiary of a Loan Party may declare and pay cash dividends or make other Restricted Subsidiarydistributions of property to a Loan Party; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, Parent under this clause (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used (w) to pay general corporate and overhead expenses incurred by Holdings to pay (or to make Restricted Payments to allow any direct the Parent in the ordinary course of business, or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect amount of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors any director or officers, employees, directors or managers, consultants or independent contractors officer of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted SubsidiariesParent, (3x) [reserved] to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings or the Parent, (4y) amounts to pay taxes that are due and payable pursuant to any investor management agreement entered into with by the Sponsor on or after Parent as the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year parent of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower a consolidated group that includes Parent and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvz) so long as no Event of Default shall have occurred and be continuing under SECTIONS 6.10, 7.01(a), 7.01(b), 7.01(h), or 7.01(i) or would result therefrom, additional to pay interest as and when due in respect of the Holdco Notes to the extent required under the Holdco Note Documents;
(ii) The Loan Parties may make Restricted Payments for the purpose of paying amounts owing under the Advisory Agreement, to the extent permitted under SECTION 6.07;
(iii) The Loan Parties may make Restricted Payments on the Closing Date to consummate the BCFWC Acquisition;
(iv) The Loan Parties may make Restricted Payments consisting of Permitted Dispositions of the type described, and subject to the limitations contained, in an amount the definition thereof; and
(v) The Loan Parties may make Restricted Payments constituting repurchases of equity interests in the Parent or any Subsidiary in connection with the exercise of stock options or warrants if such equity interests represent a portion of the exercise price of such option or warrants, provided that Restricted Payments made pursuant to this clause (v) shall not to exceed $3,000,0002,000,000 in any Fiscal Year of the Parent.
(b) The Borrower No Loan Party will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, make any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect Capital Stock (as long as no Change in Control would result therefrom) and payments of any Junior Financing prohibited by interest in-kind of the subordination provisions thereofLoan Parties;
(ii) payments of principal and interest in respect of any Subordinated Indebtedness (subject to applicable subordination provisions relating thereto);
(iii) (A) payments of principal (including mandatory prepayments) and interest as and when due in respect of any Permitted Refinancing Indebtedness (other than Subordinated Indebtedness) and (B) as long as the Payment Conditions are satisfied, prepayments of Permitted Indebtedness (other than the Senior Notes, the Holdco Notes, the Term Loan Financing Facility, Indebtedness due to the Sponsor or any of its Affiliates (other than Indebtedness due to any of the Loan Parties or their Subsidiaries) or Subordinated Indebtedness);
(iv) prepayment in whole or in part of the Senior Notes, the Holdco Notes, or the Term Loan Financing Facility with the proceeds of any equity securities issued or capital contributions received by any Loan Party or any Subsidiary for the purpose of making such payment or prepayment;
(v) prepayment in whole or in part of the Senior Notes, the Holdco Notes, or the Term Loan Financing Facility from any refinancing of the Senior Notes, the Holdco Notes, or the Term Loan Financing Facility not prohibited hereunder;
(vi) if the Payment Conditions are satisfied, prepayment in whole or in part of the Senior Notes or the Holdco Notes;
(vii) if the Term Payment Availability Conditions are satisfied, prepayment in whole or in part of the Term Loan Financing Facility;
(viii) as long as no Specified Default then exists or would arise therefrom, payments of interest only on account of Permitted Indebtedness due to the Sponsors or Sponsor Related Parties, stockholders and/or Affiliates (subject to applicable subordination provisions relating thereto);
(ix) payments of principal and interest in respect of notes issued to stockholders in connection with the repurchase of shares of Capital Stock of the Parent, provided that such payments shall not exceed $3,000,000 in any Fiscal Year, provided that, in the event the entire $3,000,000 is not utilized in any Fiscal Year, one hundred percent (100%) of such unutilized portion may be carried forward to succeeding Fiscal Years of the Parent; and
(x) refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to under this clause (viii)Agreement.
Appears in 1 contract
Samples: Credit Agreement (COHOES FASHIONS of CRANSTON, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any other Restricted Subsidiary to, make declare or paymake, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any Restricted Payment, or enter into any transaction the economic effect of which is substantially similar to any Restricted Payment, except (i) Holdings and the Borrower may declare and pay dividends with respect to their capital stock payable solely in additional shares of their respective common stock, (ii) Restricted Subsidiaries (other than the Borrower) may declare and pay dividends ratably with respect to their capital stock, (iii) Holdings may make Restricted Payments, not exceeding $3,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of Holdings and the Restricted Subsidiaries; (iv) so long as no Default shall have occurred and be continuing or result from the making of such payment, the Borrower may pay dividends to Holdings at such times and in such amounts as shall be necessary to permit Holdings to discharge, to the extent permitted hereunder, its permitted liabilities; (v) on and after the Leverage Target Date, Holdings may declare and pay dividends in cash with respect to its convertible preferred stock outstanding as of the Amendment No. 4 Effective Date in an amount not exceeding 94 $40,000,000 in any fiscal year and the Borrower may declare and pay dividends to Holdings to permit Holdings to declare and pay such dividends and (vi) at any time after the consummation of the Structured Note Financing, the Borrower may declare and pay a dividend to Holdings so long as (x) the aggregate amount of such dividend shall not exceed the principal amount of the Structured Note Bridge Indebtedness outstanding at the time such dividend is paid plus accrued interest thereon, (y) no Default has occurred and is continuing or would result therefrom and (z) immediately upon receipt thereof, Holdings shall apply all of the proceeds of such dividend to repay in full the Structured Note Bridge Indebtedness then outstanding.
(b) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, make, directly or indirectly, any voluntary payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingHigh Yield Notes, any Qualifying Holdings Debt or any Qualifying Borrower Indebtedness (collectively "Specified Indebtedness"), or any voluntary payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, Specified Indebtedness (or enter into any other payment (including any payment under any Swap Agreement) that has a transaction the economic effect of which is substantially similar effect to any of the foregoing), except:
(i) payment , provided no Default has occurred and is continuing or would result therefrom, payments of regularly scheduled interest as and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Specified Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Qualifying Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Indebtedness.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary of the Subsidiaries to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary of the Borrower may make Restricted Payments to the Borrower or Borrower, and to any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary Subsidiaries of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed Borrower that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))are Guarantors;
(ii) each Non-Guarantor Subsidiary of the Borrower may make Restricted Payments to any Excluded Subsidiary of the Borrower;
(iii) the Borrower and each Restricted other Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases payments by Borrower to repurchase or redeem qualified capital stock of Equity Interests in Holdings the Borrower held by officers, directors or employees or former officers, directors or employees (or any direct their transferees, estates or indirect parent beneficiaries under their estates) of Holdings), the Borrower or any Restricted Subsidiary deemed to occur of its Subsidiaries, upon exercise their death, disability, retirement, severance or termination of stock options employment or warrants if service; provided, that the aggregate cash consideration paid for all such Equity Interests represent a portion of the exercise price payable redemptions and repurchases shall not exceed, in connection with the exercise of such options or warrantsany Fiscal Year, $5,000,000;
(v) so long as if at the time thereof and immediately after giving effect thereto no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments the repurchase, redemption or other acquisition or retirement of Equity Interests deemed to occur upon the exercise or exchange of options, warrants or other similar rights to the extent such Equity Interests represent a portion of the exercise or exchange price of those options, warrants or other similar rights, and the repurchase, redemption or other acquisition or retirement of Equity Interests made in lieu of withholding taxes resulting from the exercise or exchange of options, warrants or similar rights; provided that the aggregate cash consideration paid for all such repurchases, redemptions or acquisitions shall not exceed, in any Fiscal Year, $3,000,000;
(vi) MediaMind and its Subsidiaries may directly or indirectly repurchase stock options pursuant to Section 3.05(a) of the Merger Agreement in respect of the Equity Interests of MediaMind existing on or prior to the Effective Date in an aggregate amount not to exceed $3,000,000.70,000,000, with the proceeds of the MediaMind Intercompany Notes pursuant to the Recharge Agreement;
(vii) the Borrower and its Subsidiaries may make Permitted Restricted Payments; and
(viii) Restricted Payments in an aggregate amount not to exceed the Permitted Corporate Basket Amount;
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingSubsidiaries to, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination agreements with respect to, or subordination terms of, any Indebtedness, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by Indebtedness arising under the subordination provisions thereofLoan Documents;
(ii) Permitted Refinancing prepayments of Indebtedness owed to the extent permitted by Section 6.01;any Loan Party; and
(iii) if at the conversion time thereof and immediately after giving effect thereto no Default or Event of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) Default shall have occurred and be continuing or would result therefrom, prepayments of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)permitted under Section 6.01.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will notNo Loan Party shall, and will not nor shall any Loan Party permit any Restricted Subsidiary of its Subsidiaries or the LS&Co. Trust to, make pay or paymake, directly or indirectly, any Restricted PaymentPayments, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdingsexcept that, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing at the time of any action described below or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
: (i) payment of regularly scheduled interest the U.S. Borrower may declare and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium pay dividends and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments distributions payable only in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity InterestsStock) of Holdings the U.S. Borrower, (ii) the U.S. Borrower may purchase Equity Interests from present or former employees, directors or other recipients (and their beneficiaries) of such Equity Interests under the U.S. Borrower’s incentive compensation plans and agreements as provided under such plans and agreements for aggregate consideration not to exceed $35.0 million in any twelve (12) Fiscal Month period, (iii) Restricted Payments to a U.S. Loan Party, (iv) Restricted Payments by any Foreign Subsidiary to any Canadian Loan Party and (v) Restricted Payments by any Foreign Subsidiary (other than a Canadian Loan Party) to any Foreign Subsidiary; provided that (i) the requirements of this Section 6.08(a) shall not apply to any Restricted Payment when the Payment Conditions with respect thereto are satisfied and the Loan Parties shall have delivered to the Administrative Agent either a certificate of a Financial Officer (with reasonably detailed calculations) certifying satisfaction of the Payment Conditions or other evidence of the same reasonably satisfactory to the Administrative Agent and (ii) no Default or Event of Default shall be deemed to have occurred if the Payment Conditions with respect to any Restricted Payment cease to be satisfied based solely on any Restricted Payments made when the Payment Conditions with respect thereto were satisfied.
(b) No Loan Party shall, nor shall any Loan Party permit any of its Subsidiaries or the LS&Co. Trust to, prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (collectively, a “prepayment”) any Indebtedness, except (i) the prepayment of the Loans in accordance with the terms of this Agreement, (ii) the prepayment of Indebtedness payable to a U.S. Loan Party, (iii) the prepayment of Indebtedness payable to a Canadian Loan Party by any Foreign Subsidiary, (iv) the prepayment of Indebtedness owed to any Foreign Subsidiary by any Foreign Subsidiary (other than a Canadian Loan Party), (v) the prepayment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is required to be repaid under the terms thereof as a result of a permitted Disposition, (vi) the prepayment of Indebtedness, in whole or in part, from the net cash proceeds of (or in exchange for) Permitted Refinancing Indebtedness, (vii) the close out of Ordinary Course Swap Agreements, (viii) the prepayment of Indebtedness of the U.S. Borrower to any of its Subsidiaries and Indebtedness of any of its Subsidiaries to the U.S. Borrower or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]other Subsidiaries to the extent such Indebtedness to be prepaid is permitted pursuant to Section 6.01, in each case, in accordance with any subordination terms thereof; and
(viii) provided in the case of a prepayment of Junior Financing owed Indebtedness of a Loan Party, at the time of such prepayment, such Loan Party would have been permitted to make an Investment in the Person to whom such prepayment is made in the amount of such prepayment and (ix) prepayment, redemption, defeasance, repurchase or other acquisition or retirement for value of the Existing Dollar Notes and the Existing Euro Notes, in each case required pursuant to the Borrower or a Restricted Subsidiary or terms thereof as in effect on the prepayment Second Amendment Effective Date; provided that (i) the requirements of Permitted Refinancing of such Indebtedness with the proceeds this Section 6.08(b) shall not apply to any payment in respect of any Indebtedness when the Payment Conditions with respect to such payment are satisfied and the Loan Parties shall have delivered to the Administrative Agent either a certificate of a Financial Officer (with reasonably detailed calculations) certifying satisfaction of the Payment Conditions or other Junior Financing; provided, that, evidence of the same reasonably satisfactory to the Administrative Agent and (ii) no Loan Party Default or Event of Default shall make any prepayment of Junior Financing owed be deemed to have occurred if the Payment Conditions with respect to any Restricted Subsidiary that is not a Loan Party pursuant such payment in respect of Indebtedness cease to this clause (viii)be satisfied based solely on any payments in respect of Indebtedness made when the Payment Conditions with respect thereto were satisfied.
Appears in 1 contract
Samples: Credit Agreement (Levi Strauss & Co)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary the Company may make declare and pay Restricted Payments with respect to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of its Equity Interests or repurchase any of its Equity Interests, in each case payable solely in shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such Restricted Subsidiary based on their relative ownership interests preferred stock or in shares of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));its common stock,
(ii) the Borrower Subsidiaries may declare and each pay Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Payments ratably with respect to their Equity Interests) of such Person;,
(iii) [reserved]so long as no Default exists or would be caused thereby, the Company may make Restricted Payments, not exceeding $7,500,000 during any fiscal year of the Company plus any required Restricted Payments to directors of the Company, pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of the Borrowers and their Subsidiaries;
(iv) non-cash repurchases of Equity Interests in Holdings (so long as no Default exists or any direct or indirect parent of Holdings)would be caused thereby, the Borrower or Company may make scheduled quarterly dividends in an aggregate amount not to exceed $15,000,000 during any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion fiscal quarter of the exercise price payable Company, provided, that nothing in connection with this Section 6.08(a)(iv) shall operate to prevent the exercise making of a previously declared Restricted Payment by the Company so long as (i) at the declaration date or execution date, such options Restricted Payment was permitted by the foregoing and (ii) such Restricted Payment is consummated within the earlier of 60 days and any date under applicable Law on which such dividend or warrantsrepurchase must be consummated;
(v) so long as no Event of Default has occurred and is continuing exists or would immediately result therefrombe caused thereby, the Company and its Subsidiaries may make other Restricted Payments as follows:
(x) without limit if the pro forma Modified Net Leverage Ratio is less than 2.50:1.0 after giving effect to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests such Restricted Payment,
(or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interestsy) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with in any fiscal year of the aggregate amount of loans and advances Company, when added to Holdings the Investments made pursuant to under Section 6.04(l6.04(e) in lieu of Restricted Payments permitted by this clause (v) such fiscal year, not to exceed $1,000,000 125,000,000 in any calendar such fiscal year with unused amounts in any calendar year being carried over if the pro forma Modified Net Leverage Ratio is less than 3.00:1.0 but greater than or equal to succeeding calendar years; provided that (A) the aggregate amount of all 2.50:1.0 after giving effect to such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and Payment, and
(Bz) such in an aggregate amount in any calendar fiscal year may be increased by an amount of the Company, when added to the Investments made under Section 6.04(e) in such fiscal year, not to exceed $50,000,000 in such fiscal year if the cash proceeds of key man life insurance policies received pro forma Modified Net Leverage Ratio is greater than or equal to 3.00:1.0 after giving effect to Restricted Payment (and the pro forma Modified Net Leverage Ratio determined under this Section 6.04(e) shall be on a pro forma basis in accordance with Section 1.05 and, if requested by the Borrower (or Administrative Agent, supported by Holdings a certificate of the Company with such pro forma calculation in form and contributed detail reasonably satisfactory to the Borrower) or the Restricted Subsidiaries after the Effective DateAdministrative Agent);
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any noncash repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8options; and
(xvvii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments which are not material in an amount not to exceed $3,000,000.
(b) The Borrower will notthe aggregate, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any which are used by the Company to make cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other Junior Financing; provided, that, no Loan Party shall make any prepayment securities convertible into or exchangeable for Equity Interests of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)the Company.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower FCX will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary Subsidiaries may make Restricted Payments declare and pay dividends ratably with respect to their capital stock (A) to shareholders other than FCX, (B) to FCX to the Borrower or any other Restricted Subsidiary; provided that extent the proceeds of such dividends are applied to pay operating expenses in the case ordinary course of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerbusiness, such Restricted Payment is made and (C) to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) FCX so long as (1) no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this under clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (ha) or (ib) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or would (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such payment;
(C) the proceeds of which dividends shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with paid during the closing pendency of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any Event of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;Default,
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvii) so long as no Event of Default shall have occurred and be continuing (or would shall result therefromfrom the payment thereof), additional Restricted Payments FCX may pay regularly scheduled quarterly dividends in respect of its preferred stock issued and outstanding on the Effective Date and effect regularly scheduled mandatory redemptions of its preferred stock issued and outstanding on the Effective Date, in each case, to the extent and in the amounts required by the terms of such preferred stock as in effect on the Effective Date,
(iii) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), FCX may, consistent with its dividend practices as of the Effective Date, and subject to the Incurrence Test, declare and pay dividends on its shares of common stock (and on shares of common stock issued upon the conversion of or in exchange for shares of FCX’s 5½% Convertible Perpetual Preferred Stock outstanding on the Effective Date) in an amount in respect of any fiscal quarter not to exceed $3,000,0000.3125 per share of FCX’s common stock (adjusted as applicable to eliminate the effect of stock dividends, stock splits, reverse stock splits and other transactions in respect of such shares of common stock, and payable in respect of any shares of common stock received pursuant to any such stock dividend, stock split, reverse stock split or other transaction) (it being understood that Restricted Payments made in reliance on this clause (iii) in respect of shares of FCX’s common stock issued or sold after the Effective Date (or in respect of shares received in stock dividends, stock splits, reverse stock splits or other transactions in respect of such shares of common stock) involving either (x) a receipt of cash proceeds that increased the Restricted Uses Basket or (y) the receipt of assets in consideration for such common stock shall constitute Restricted Uses and shall reduce the Restricted Uses Basket (which reduction may be to less than zero)), and
(iv) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), and subject to the Incurrence Test, FCX may make Restricted Payments in cash in any amounts to the extent that, immediately after giving effect thereto (and to any expenditure of cash required thereby), the Restricted Uses would not be greater than the Restricted Uses Basket.
(b) The Each Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property) of of, or in respect of of, principal of or interest on any Junior FinancingIndebtedness, or any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents and payment of Ratable FCX Obligations, Ratable Cyprus Obligations and Ratable PD Obligations;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
6.01(a) (iii) including, without limitation, the conversion refinancing of any Junior Financing to Equity Interests (Indebtedness, other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe Senior Notes, with Indebtedness permitted under Section 6.01(a)(xi));
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]prepayments of Indebtedness owed to FCX by a Restricted Subsidiary or owed to a Restricted Subsidiary by FCX or another Restricted Subsidiary; provided that prepayments of Indebtedness owed to a Restricted Subsidiary that is not a PCA Loan Party shall be permitted only to the extent no Event of Default has occurred and is continuing at the time of such prepayment, except that such prepayments shall be permitted (A) to the extent the proceeds of such prepayments are applied to pay operating expenses or to make Capital Expenditures in the ordinary course of business, and (B) to the extent the proceeds of such prepayments are applied to pay scheduled debt service of such Restricted Subsidiary so long as (1) no Event of Default under clause (a) or (b) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such prepayments shall not be permitted to be paid during the pendency of such Event of Default;
(vi) [reserved]prepayments of any Project Financing to the extent made by the applicable Project Financing Subsidiary with cash from the operations of such Project Financing Subsidiary;
(vii) [reserved]payments of Indebtedness (other than Indebtedness referred to in clause (viii) below) that are not permitted by clauses (i)-(vi) of this Section 6.08(b) if and to the extent that after giving effect to any such payments, the Restricted Uses would not be greater than the Restricted Uses Basket; and
(viii) prepayment payments of Junior Financing owed to Indebtedness created under the Borrower or a Restricted Subsidiary or Parent Credit Agreement and the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no “Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Documents” thereunder.
Appears in 1 contract
Samples: Credit Agreement (Freeport McMoran Copper & Gold Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional Equity Interests, (ii) Subsidiaries may declare and pay dividends or other distributions ratably with respect to their Equity Interests, (iii) so long as there exists no Default or Event of Default, the Borrowers may make Restricted Payments pursuant to the Borrower and in accordance with Equity Interest option plans or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary benefit plans for management or employees of the BorrowerBorrowers and their Subsidiaries, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as there exists no Default or Event of Default has occurred and the Company is continuing a “flow through” or would immediately result therefrom“disregarded” entity for United States federal income tax purposes, Restricted Payments to Holdings, which Holdings the Company may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (pay dividends or make Restricted Payments distributions to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, its members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with not greater than the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause necessary for such members (v) not to exceed $1,000,000 in or, if any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on member is a “flow through” or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely “disregarded” entity for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. United States federal income Tax tax purposes, any the members of such member) to pay their actual state and United States federal, state and local income Taxes required to be paid tax liabilities in respect of income earned by the direct or indirect parent of Holdings on its taxable income attributable Borrowers, and (v) the Company shall be permitted to the Borrower pay dividends and its Subsidiaries for any taxable yeardistributions; provided, that such dividends and distribution shall only be permitted if (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation there exists no Default or individual, whichever is higher, whose sole asset is its indirect interest in BorrowerEvent of Default, (2) taking into account the character Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such dividend and distribution) would not be less than 1.25 to 1 for the most recently completed twelve month period assuming that for purposes of income or gain calculating the Fixed Charge Coverage Ratio for such period (calculated on a pro forma basis in a manner acceptable to the Administrative Agent) such dividends and any allowable federal income tax deduction for state and local taxesdistributions occurred on the first day of such applicable period, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, immediately after giving effect to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items payment of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash dividends and reduce Consolidated Net Income of Holdings distributions and for the applicable period when paid) (1) [reserved]next succeeding twelve month period, (2) any reasonable and customary indemnification claims made by members Availability will not be less than the greater of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing $25,000,000 or would result from such payment;
(Cii) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership 10% of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) US Revolving Commitments at such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investmenttime, in each case case, on a pro forma basis (calculated in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous a manner acceptable to the Lenders in Administrative Agent and assuming all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu past due accounts payable of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would Borrowers have been payable under such tax receivable agreement paid in full in cash at the absence time of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payment and no accounts payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of Borrowers are allowed to become past due during such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Intereststwelve month period thereafter);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent6.1;
(iv) [reserved];payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment repayments or repurchases of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior FinancingSenior Notes; provided, thatthat (1) immediately after giving effect to such repayment or repurchase and for the next succeeding twelve month period, Availability will not be less than the greater of (i) $25,000,000 or (ii) 10% of the US Revolving Commitments at such time, in each case, on a pro forma basis (calculated in a manner acceptable to the Administrative Agent and assuming all past due accounts payable of the Borrowers have been paid in full in cash at the time of such payment and no Loan Party shall make any prepayment accounts payable of Junior Financing owed the Borrowers are allowed to any Restricted Subsidiary become past due during such twelve month period thereafter), and (2) the Fixed Charge Coverage Ratio for the Borrowers (after giving effect to such repayment or repurchase) would not be less than 1.0 to 1 for the most recently completed twelve month period assuming that is not for purposes of calculating the Fixed Charge Coverage Ratio for such period (calculated on a Loan Party pursuant pro forma basis in a manner acceptable to this clause (viii)the Administrative Agent) such repayment or repurchase occurred on the first day of such applicable period.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each the Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests;
(ii) Holdings may declare and pay dividends with respect to its Equity Interests payable solely in shares of Qualified Equity Interests;
(iii) the Borrower may, or may make Restricted Subsidiary Payments to Holdings and Holdings may, make Restricted Payments, not exceeding, taken together with the aggregate principal amount of all Indebtedness incurred under Section 6.01(a)(xiv) during such fiscal year, $5,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans approved by the Borrower’s board of directors for former or current management, directors, Franchisees or employees of Holdings, the Borrower or any of the Subsidiaries;
(iv) the Borrower may make Restricted Payments to Holdings at such times and in such amounts (A) not exceeding $5,000,000 during any fiscal year, as shall be necessary to permit Holdings to discharge its general corporate and overhead (including franchise taxes and directors fees and, following the completion of an IPO, costs and expenses necessary for or incidental to Holdings’s continued existence as a public company) expenses incurred in the ordinary course and other permitted liabilities and (B) as shall be necessary to pay the Tax liabilities of Holdings directly attributable to (or arising as a result of) the operations of the Borrower and the Subsidiaries, provided, however, that (1) the amount of Restricted Payments pursuant to clause (B) of this clause (iv) shall not exceed the amount that the Borrower and the Subsidiaries would be required to pay in respect of Federal, State and local taxes were the Borrower and the Subsidiaries to pay such taxes as stand-alone taxpayers and (2) all Restricted Payments made to Holdings pursuant to this clause (iv) are used by Holdings for the purposes specified herein within five Business Days after Holdings’s receipt thereof;
(v) the Borrower may make Restricted Payments to the Borrower extent necessary to permit Holdings to make payments of or any other Restricted Subsidiary; provided that in the case on account of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary (A) management, consulting, investment banking and advisory fees and (B) reimbursement of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary out-of-pocket costs and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable expenses incurred in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred management, consulting, investment banking and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiariesadvisory services, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) Sponsors or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, Sponsor Affiliates to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of incomepermitted by Section 6.09, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such paymenttherefrom;
(Cvi) on or after (A) July 1, 2007, the proceeds Borrower may declare and pay dividends and distributions to Holdings, and Holdings may declare and pay dividends and distributions with respect to, or otherwise repurchase, redeem or retire, its Equity Interests, up to an amount, taken together with the aggregate amount of which shall be used by Holdings Investments made under Section 6.04(q), equal to pay ordinary course administrative50% of Excess Cash Flow from and after July 1, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to 2005, through the operations or ownership end of the most-recently ended fiscal year of the Borrower and its Subsidiaries;
(D) prior to finance any Investment made by Holdings thatthe date of such dividend, if made by the Borrowerdistribution, would be permitted to be made repurchase, redemption or retirement for which financial statements have been delivered pursuant to Section 6.04; 5.01(a), provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) at the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination time of any such agreement or otherwisedividend, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend repurchase, redemption or otherwiseretirement, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional (y) at the time of such dividend, distribution, repurchase, redemption or retirement and after giving effect thereto and to any borrowing in connection therewith, the Leverage Ratio on a Pro Forma Basis as of the last day of the most-recently ended fiscal quarter of the Borrower for which financial statements have been delivered pursuant to Section 5.01(a) or (b) is less than 3.00 to 1.00 and (z) in the case of any such Restricted Payments Payment in an amount in excess of $15,000,000, the Borrower has delivered to the Administrative Agent a certificate of a Financial Officer, together with all relevant financial information reasonably requested by the Administrative Agent, demonstrating the calculation of such Excess Cash Flow or (B) the completion of an IPO, the Borrower may declare and pay dividends and distributions to Holdings, and Holdings may declare and pay dividends and distributions with respect to, or otherwise repurchase, redeem or retire, its common share Equity Interests, up to an amount, taken together with the aggregate amount of Investments made under Section 6.04(q), equal to the greater of (x) 50% of Excess Cash Flow from and after July 1, 2005, through the end of the most-recently ended fiscal year of the Borrower prior to the date of such dividend, distribution, repurchase, redemption or retirement for which financial statements have been delivered pursuant to Section 5.01(a), and (y) the sum of (1) $50,000,000, (2) 50% of Consolidated Net Income of Holdings during the period from and after December 31, 2005, to the end of the most-recently ended fiscal quarter of Holdings prior to the date of such dividend or distribution for which financial statements have been delivered pursuant to Section 5.01(a) or (b) (or in case such Consolidated Net Income shall be a deficit, minus 100% of such deficit) and (3) the aggregate amount of proceeds received by Holdings as a result of the issuance of Qualified Equity Interests (other than such proceeds used in accordance with Section 6.08(vii)), provided that (x) at the time of such dividend, no Default shall have occurred and be continuing or would result therefrom and (y) at the time of such dividend and after giving effect thereto, the Borrower complies, on a Pro Forma Basis, with the covenants set out in Sections 6.12 and 6.13;
(vii) concurrently with any issuance of Qualified Equity Interests, Holdings may redeem, purchase or retire any Equity Interests of Holdings using the proceeds of, or convert or exchange any Equity Interests of Holdings for, such Qualified Equity Interests;
(viii) the Borrower may make Restricted Payments to Holdings in such amounts as shall be necessary to pay out-of-pocket legal, accounting and filing fees, costs and expenses incurred in connection with a proposed initial public offering of Qualified Equity Interests of Holdings, provided that no Default shall have occurred and be continuing or would result therefrom;
(ix) the Borrower may make Restricted Payments to Holdings in such amounts as are necessary to repay in full on the Effective Date the PIK Notes;
(x) the Borrower or Holdings may make up to $5,000,000 of Restricted Payments on, or within 15 days of, the Effective Date to finance the return of capital and accrued interest to participants in the Investment Deferred Compensation Plan of the Borrower and Holdings;
(xi) the Borrower may make Restricted Payments to Holdings in an amount necessary to enable Holdings to make required payments in respect of Disqualified Equity Interests or Subordinated Debt issued by Holdings, provided that (i) such payments are permitted (x) in the case of Disqualified Equity Interests, by another clause of this Section 6.08 or (y) in the case of Subordinated Debt, by paragraph (b) of this Section 6.08 and (ii) Holdings promptly applies such proceeds in the manner required by such Disqualified Equity Interests or Subordinated Debt;
(xii) the Borrower or any Subsidiary may acquire, redeem or retire any Equity Interests of any other Subsidiary provided that such acquisition, redemption or retirement is permitted pursuant to Sections 6.03 and 6.04;
(xiii) notwithstanding any other provision of this Section 6.08 and Section 6.09, with the proceeds of the Tranche B-1 Term Loans funded by the Tranche B-1 Lenders (and not converted) (other than that portion of the Tranche B-1 Term Loans used to prepay the Original Tranche B Term Loans on the Restatement Effective Date) and the Cash Amount, (A) the Borrower may declare and pay a dividend to Holdings, (B) Holdings may declare and pay a dividend with respect to common share Equity Interests in Holdings and (C) the Borrower or Holdings may make payments to holders of options to acquire common share Equity Interests in Holdings and holders of restricted share unit awards issued by Holdings, provided that the aggregate amount of dividends and payments made by each of the Borrower and Holdings under this paragraph (xiii) shall not exceed $3,000,000400,000,000, provided further that (x) at the time of such dividend or payment, no Default shall have occurred and be continuing or would result therefrom and (y) at the time of such dividend or payment and after giving effect thereto, the Borrower complies, on a Pro Forma Basis, with the covenants set out in Sections 6.12 and 6.13; and
(xiv) substantially concurrently with an IPO, and in any event, no later than 30 Business Days following the issue or transfer of Equity Interests pursuant to such IPO, the Borrower may make Restricted Payments to Holdings to the extent necessary to permit Holdings to make the payment of the fees permitted to be paid pursuant to Section 6.09(ix)(B), provided that (A) no Default shall have occurred and be continuing or would result therefrom and (B) at the time of such payment and after giving effect thereto, the Borrower complies, on a Pro Forma Basis, with the covenants set out in Sections 6.12 and 6.13.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectlyindirectly (other than agreeing to customary provisions in respect of repayment and repurchase upon asset sales in any Subordinated Debt Documents), any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingSubordinated Debt, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior FinancingSubordinated Debt, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
(i) payment of regularly scheduled interest and principal paymentspayments as, mandatory offers to repayin the form of payment and when due in respect of any Subordinated Debt, repurchase payments due upon a change of control under any Subordinated Debt or redeemupon acceleration of the maturity of any Subordinated Debt, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, in each case other than payments in respect of any Junior Financing Subordinated Debt prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;; and
(iii) payment or other distribution in respect of principal or interest on, or payment or other distribution on account of the conversion purchase, redemption, retirement, acquisition, cancelation or termination of, any Subordinated Debt, in each case exchange for, or out of any Junior Financing to the Net Proceeds of, the substantially concurrent sale of Qualified Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Holdings.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Loan Parties will not, and will not permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to as long as no Default or Event of Default exist or would arise therefrom the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));may declare and pay Permitted Dividends; and
(ii) if the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in Payment Conditions are satisfied at the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion time of the exercise price payable in connection with proposed redemption the exercise of such options or warrants;
Parent may redeem its Capital Stock, provided that the Loan Parties shall have provided ten (v10) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments days prior written notice to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment Administrative Agent of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with proposed redemption after the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to redemptions during any twelve month period exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000500,000.
(b) The Borrower Loan Parties will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, cash securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) as long as no Default or Event of Default has occurred and is continuing or would result from such payments or distribution:
(A) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereof;other Indebtedness permitted hereunder; and
(iiB) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01.
(ii) repayment, redemption or repurchase of Indebtedness evidenced by the Senior Subordinated Notes and Senior Subordinated Note Documents provided that, the Payment Conditions are met; (x) immediately prior to such payment and (y) on a proforma basis determined as if such payment occurred on the first day of the thirteen (13) Fiscal Periods ended on the last day of the most recent Fiscal Period for which the Borrowers were required to deliver financial reports pursuant to Section 5.01(b) hereof;
(iii) repayment in full of Permitted Indebtedness, in the conversion of aggregate amount not to exceed $5,000,000.00 during any Junior Financing twelve (12) month period , provided that immediately before and after giving effect to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentsuch repayment the Payment Conditions are satisfied;
(iv) [reserved]the repayment in full of Permitted Indebtedness, other than Indebtedness evidenced by the Senior Subordinated Notes and Senior Subordinated Note Documents, in the aggregate amount greater than $5,000,000.00 during any twelve (12) month period provided that, (a) the Payment Conditions are satisfied immediately prior to such payment and (b) the Administrative Agent determines in its reasonable discretion that the Payment Conditions shall be met on a pro forma basis for the thirteen (13) Fiscal Periods immediately following the proposed payment based upon projections provided by the Lead Borrower to the Administrative Agent which projections give effect to the proposed payment;
(v) [reserved];payments in connection with the termination of the SERP; and
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payments in respect of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness Senior Credit Facility Obligations in accordance with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Intercreditor Agreement.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary may make Restricted Payments to the Borrower may declare and pay dividends with respect to its common stock or any other Restricted Subsidiary; provided that Qualified Preferred Stock payable solely in the case additional shares of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerits common stock or Qualified Preferred Stock, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests Subsidiaries (other than Disqualified Equity Intereststhose directly owned, in whole or part, by the Borrower) of such Person;
may declare and pay dividends ratably with respect to their common stock, (iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred may declare and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued pay cash dividends with respect to any such Equity Interests) its common stock and effect repurchases, redemptions or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make other Restricted Payments with respect to allow any of Holdings’ direct or indirect parent companies to so redeemits common stock, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement together in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event the Borrower not to exceed 50% of Default specified in Section 7.01(a), Consolidated Net Income (b), (hif positive) or (i) shall have occurred and be continuing or would result from such payment;
(C) for the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership immediately preceding fiscal year of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment immediately prior and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related after giving effect to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole such payment no Default or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefromand, additional Restricted Payments immediately after giving effect to any such payment, the Borrower shall have Revolver Availability of more than $100,000,000, (iv) the Borrower may pay cash dividends in an amount not to exceed $3,000,00060,000,000 in any fiscal year of the Borrower with respect to the Series E Preferred Stock, Series I Preferred Stock or any other Qualified Preferred Stock; provided that (x) immediately prior and after giving effect to any such payment, no Default or Event of Default shall have occurred and be continuing and (y) only so long as a Financial Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended on or prior to the date of such payment, calculated on a pro forma basis as if such payment were made on the last day of such period (and excluding any such payments previously made pursuant to this clause during such four quarter period but attributed for purposes of this calculation to the last day of a prior period which day does not occur in such four quarter period) is not less than the ratio applicable to such period of four fiscal quarters under Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments consisting of the repurchase or other acquisition of shares of, or options to purchase shares of, capital stock
(A) solely with Net Cash Proceeds received by the Borrower from issuances of its common stock after the Third Amendment Effective Date, provided that any such repurchase or redemption is effected within 150 days after the receipt of such proceeds or (B) with other funds available to the Borrower if, immediately after giving effect to any such redemption or repurchase, the Borrower shall have Revolver Availability of more than $100,000,000 or (2) shares of Class A Cumulative Preferred Stock of Rite Aid Lease Management Company with cash and/or a debt-for-equity exchange in an aggregate amount not to exceed $25,000,000 if immediately after giving effect to any such redemption or repurchase, the Borrower shall have Revolver Availability of more than $100,000,000.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment payments or prepayments of Indebtedness created under the Senior Loan Documents;
(ii) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness permitted pursuant to Section 6.01(a);
(iiiii) Permitted Refinancing (A) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(v) or (vi) with the proceeds of Indebtedness permitted pursuant to Section 6.01(a)(v) or (vi) and (B) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(vii) with the proceeds of Indebtedness permitted pursuant to Section 6.01(a)(vii);
(iv) payments of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) provided no Default has occurred and is continuing or would result therefrom, Optional Debt Repurchases of Inside Indebtedness and, to the extent permitted by Section 6.01;
paragraph (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interestsc) of Holdings or any this section, Optional Debt Repurchases of its direct or indirect parent;
(iv) [reserved];
(v) [reserved]Outside Indebtedness;
(vi) [reserved]repurchases, exchanges or redemptions of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified Preferred Stock;
(vii) [reserved]prepayments of Capital Lease Obligations in connection with the sale, closing or relocation of Stores;
(viii) prepayments of Indebtedness in connection with the incurrence of Refinancing Indebtedness permitted pursuant to Section 6.01(a)(ii) or (viii); and
(viiiix) prepayment prepayments of Junior Financing owed Indebtedness permitted pursuant to Section 6.01(a)(iii), if permitted by the subordination provisions applicable to such Indebtedness.
(c) The Borrower and the Subsidiaries will not effect Optional Debt Repurchases of Outside Indebtedness unless immediately prior and after giving effect to any such Optional Debt Repurchases, (x) no Default or Event of Default shall have occurred and be continuing and (y) the Borrower or a Restricted Subsidiary or the prepayment shall have Revolver Availability of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)more than $100,000,000.
Appears in 1 contract
Samples: Credit Agreement (Rite Aid Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or pay, directly or indirectly, declare, order, make or set apart any sum for or pay any Restricted Payment, except:
(i) each Restricted Subsidiary may to make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that dividends payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant same class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(ii) to make dividends or other distributions payable to the Credit Parties (directly or indirectly through its Subsidiaries);
(iii) [reserved]after an offering of Qualified Equity Interests completed after the Closing Date, an amount equal to 6% per annum of the Net Cash Proceeds received by (or contributed to) the Borrower and its Restricted Subsidiaries from any such offering(s) completed after the Closing Date;
(iv) non-cash repurchases so long as no Event of Equity Interests in Holdings (Default has occurred and is continuing at the time of making such Restricted Payment or any direct or indirect parent of Holdings)would immediately result therefrom, the Borrower or any may make Restricted Subsidiary deemed Payments in the form of cash dividends payable with respect to occur upon exercise of stock options or warrants if such Equity Interests represent a portion shares of the exercise price payable Borrower’s Series A Convertible Preferred Stock in connection an amount not to exceed $2,000,000 per annum provided that, on a Pro Forma Basis, immediately after giving effect to such Restricted Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal quarter for which financial statements are required to be delivered (or are actually delivered, if earlier) prior to such date and for the Test Period ending on such date, is less than or equal to 0.25:1.00 less than the Total Net Leverage Ratio required to then comply with each of the exercise of such options or warrantsFinancial Covenants then in effect;
(v) so long as no Event of Default has occurred and is continuing at the time of making such Restricted Payment or would immediately result therefrom, the Borrower may make additional Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 the Available Amount as of such date; provided that, solely to the extent that such Restricted Payment is made with any portion of the Available Amount described in any clause (a) of the definition thereof, on a Pro Forma Basis, immediately after giving effect to such Restricted Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal year of Holdingsquarter for which financial statements are required to be delivered (or are actually delivered, if earlier) prior to such date and for the Test Period ending on such date, is less than or equal to 3.00:1.00;
(vi) so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have has occurred and be is continuing or would result from such payment;
(C) at the proceeds time of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) making such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shallor would immediately result therefrom, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make additional unlimited Restricted Payments Payments; provided that, on a Pro Forma Basis, immediately after giving effect to allow Holdings to (a) pay cash in lieu such Restricted Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the issuance last day of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines most recent fiscal quarter for which financial statements are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant delivered (or their respective controlled Affiliates or permitted transfereesare actually delivered, if earlier) prior to such date and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of for the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends Test Period ending on such company’s common stock)date, following consummation of an IPO, of up is less than or equal to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-81.50:1.00; and
(xvvii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments to pay dividends and/or redeem shares of common stock in an aggregate amount not to exceed $3,000,00035,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment prepayment (including voluntary and mandatory prepayments), repurchase or other distribution redemption (whether in cash, securities or other property) of or in respect of principal or any interest, fees or other amounts of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of the principal of any Junior Financing, or any other payment (including any payment under any Swap Agreement) Financing that has a substantially similar effect to any of the foregoing, in each case, prior to the scheduled maturity thereof (excluding any payments of regularly scheduled principal, interest, fees, expenses and indemnification obligations in compliance with the terms of this Agreement) (any of the foregoing, a “Restricted Debt Payment”), except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing (other than Subordinated Indebtedness) not otherwise prohibited by the subordination provisions thereofterms of this Agreement, including mandatory prepayments made with Declined Proceeds;
(ii) Permitted Refinancing Refinancings of Indebtedness to the extent permitted by Section 6.016.1;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe Borrower;
(iv) [reserved]so long as no Event of Default has occurred and is continuing at the time of making such Restricted Debt Payment or would immediately result therefrom, additional Restricted Debt Payments in respect of any Junior Financings in an aggregate amount not to exceed the Available Amount as of such date; provided that, solely to the extent that such Restricted Debt Payment is made with any portion of the Available Amount described in clause (a) of the definition thereof, on a Pro Forma Basis, immediately after giving effect to such Restricted Debt Payment , the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal quarter for which financial statements are required to be delivered (or are actually delivered, if earlier) prior to such date and for the Test Period ending on such date, is less than or equal to 3.00:1.00;
(v) [reserved]so long as no Event of Default has occurred and is continuing at the time of making such Restricted Debt Payment or would immediately result therefrom, additional unlimited Restricted Debt Payments ; provided that, on a Pro Forma Basis, immediately after giving effect to such Restricted Debt Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal quarter for which financial statements are required to be delivered (or are actually delivered, if earlier) and for the Test Period ending on such date, is less than or equal to 1.50:1.00;
(vi) [reserved];
(vii) [reserved]additional Restricted Debt Payments in an aggregate amount not to exceed $10 million; and
(viiiA) prepayment Restricted Debt Payments with Eligible Equity Proceeds, to the extent such Eligible Equity Proceeds have not otherwise been applied to make any Investment, Restricted Payment or Restricted Debt Payment hereunder and do not increase the Available Amount, (B) the conversion of all or any portion of any Junior Financing owed into Qualified Equity Interests of the Borrower, (C) to the Borrower or extent constituting a Restricted Subsidiary or the prepayment Debt Payment , payment-in-kind of Permitted Refinancing of such Indebtedness interest with the proceeds of respect to any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant permitted under Section 6.1, and (D) Restricted Debt Payments as part of an “applicable high yield discount obligation” catch up payment with respect to this clause (viii)Indebtedness permitted by Section 6.1.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Parent nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary Parent may make Restricted Payments declare and pay dividends with respect to the Borrower or any other Restricted Subsidiary; provided that its capital stock payable solely in the case additional shares of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))its common stock;
(ii) the Borrower Subsidiaries may declare and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Personpay dividends ratably with respect to their capital stock;
(iii) [reserved]the Borrower may pay dividends to Parent at such times and in such amounts equal to the amounts required for Parent to pay taxes, franchise fees and other fees required to maintain its corporate existence and provide for other operating costs of up to $7,500,000 during any fiscal year (other than liabilities in respect of the Parent Discount Debentures);
(iv) non-cash repurchases the Borrower may pay dividends to Parent in amounts equal to amounts necessary for Parent to make loans or advances to employees in the ordinary course of Equity Interests business in Holdings (accordance with past practices of the Borrower, but in any event not to exceed, when aggregated with amounts loaned or any direct or indirect parent of Holdingsadvanced under Section 6.04(i), $5,000,000 in the Borrower or aggregate outstanding at any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrantsone time;
(v) so long as any purchase, repurchase, retirement, defeasance or other acquisition or retirement for value of Equity Interests of Parent made by exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of Parent (other than Disqualified Stock and other than Equity Interests issued or sold to the Borrower or a Subsidiary or an employee stock ownership plan or other trust established by the Borrower or any of the Subsidiaries);
(vi) the Borrower may during any fiscal year, provided that no Default or Event of Default has occurred and is continuing or would immediately will occur as a result therefromof such payment and to the extent permitted by the Subordinated Debt Documents and the New Senior Debt Documents as in effect on the date hereof, pay dividends to Parent when and to the extent necessary (or to the extent (A) Parent is permitted by the terms of this Agreement and the Parent Discount Indenture to make a cash interest payment in respect of the Parent Discount Debentures and (B) Parent uses such dividends (net of any Taxes payable by Parent in respect of such dividends) to make such cash interest payment) to fund payments of interest accrued during such year on the Parent Discount Debentures;
(vii) the Borrower may make to Parent, and Parent may make to its shareholders, Restricted Payments in an aggregate amount (without duplication) not to Holdingsexceed the Permitted Distribution Amount, which Holdings may use PROVIDED that (A) any Restricted Payment made by Parent and the Borrower pursuant to redeemthis clause (vii) shall reduce, acquireon a dollar-for-dollar basis, retirethe amount of the Permitted Distribution Amount available for payments pursuant to clause (viii) of Section 6.08(b), repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect B) prior to any such Equity Interests) or Restricted Payment pursuant to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest this clause (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereofvii), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed deliver to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock Administrative Agent a certificate of a Financial Officer of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, certifying that (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have has occurred and be is continuing or would result from such payment;
Restricted Payment and (C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A2) such Restricted Payment shall will be made substantially concurrently with cash and Cash Equivalents on the closing balance sheet of such Investment the Borrower without giving effect to any Revolving Borrowings and (BC) Holdings shall, immediately following the closing thereof, cause any dividend made by Parent to its shareholders pursuant to this clause (1vii) all property acquired (whether assets or Equity Interests) must be made to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case its shareholders ratably in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any their equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];ownership; and
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make to Parent, and Parent may make to its shareholders, Restricted Payments in an aggregate amount (without duplication) not to allow Holdings to (a) pay cash in lieu exceed 50% of the issuance Excess Cash Flow of fractional Equity Interests the Borrower during the period (treated as one account period) commencing at the end of the fiscal quarter in connection with any dividend, split which the Effective Date occurs and ending at the end of the most recent fiscal period for which financial statements have been provided to the Lenders pursuant to Section 5.01(a) or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) this Agreement, PROVIDED that (A) without duplication of any Restricted Payment made pursuant to this clause (x) shall reduce, on a dollar-for-dollar basis, the amount available for payments pursuant to clause (ix) of Section 6.08(b), (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary prior to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made Payment pursuant to Section 6.07(a)(vi)(A)(iithis clause (x), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower certifying as to the matters set forth in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant clauses (or their respective controlled Affiliates or permitted transfereesB)(1) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion (2) of the exercise price PROVISO in clause (vii) of this Section 6.08(a) and (C) any dividend made by Parent to its shareholders pursuant to this clause (viii) must be made to such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings shareholders ratably in accordance with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000their equity ownership.
(b) The Neither Parent nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of (A) regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Senior Subordinated Notes prohibited by the subordination provisions thereofthereof and (B) in any fiscal year, interest accrued during such fiscal year in respect of the Parent Discount Debentures;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]payment of Indebtedness of the Borrower and the Subsidiaries existing on the Effective Date and set forth in Schedule 6.01;
(vi) [reserved]payment to any Person of Indebtedness of the Borrower or any Subsidiary (other than a License Subsidiary) that is incurred to finance the purchase of equipment or other fixed assets and is secured by such equipment or other fixed assets, PROVIDED that (A) the aggregate amount of all payments made pursuant to this clause (vi) does not exceed (1) $2,500,000 during any fiscal year of the Borrower and (2) $5,000,000 during the term of this Agreement and (B) all such payments shall be made using existing cash of the Borrower or any Subsidiary (other than a License Subsidiary);
(vii) [reserved]; andpayment of the ACS Media Holdings Notes described in clause (a) of the definition of the term "ACS Media Transaction";
(viii) prepayment payment for the repurchase, redemption, retirement or cancelation of Junior Financing owed (x) Parent Discount Debentures, (y) Senior Subordinated Notes or (z) New Senior Notes in an aggregate amount not to exceed the Permitted Distribution Amount, PROVIDED that (A) any payment made by Parent or the Borrower or pursuant to this clause (viii) shall reduce, on a Restricted Subsidiary or dollar-for-dollar basis, the prepayment amount of the Permitted Refinancing Distribution Amount available for payments pursuant to clause (vii) of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed Section 6.08(a) and (B) prior to any Restricted Subsidiary that is not a Loan Party payment pursuant to this clause (viii), the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower certifying as to the matters set forth in clauses (B)(1) and (2) of the PROVISO in clause (vii) of Section 6.08(a);
(ix) payment for the repurchase, redemption, retirement or cancelation of (x) Parent Discount Debentures, (y) Senior Subordinated Notes or (z) New Senior Notes in an aggregate amount not to exceed 50% of the Excess Cash Flow of the Borrower during the period (treated as one accounting period) commencing at the end of the fiscal quarter in which the Effective Date occurs and ending at the end of the most recent fiscal period for which financial statements have been provided to the Lenders pursuant to Section 5.01(a) or (b) of this Agreement, PROVIDED that (A) any payment made by Parent or the Borrower pursuant to this clause (ix) shall reduce, on a dollar-for-dollar basis, the amount available for payments pursuant to clause (viii) of Section 6.08(a) and (B) prior to any payment pursuant to this clause (x), the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower certifying as to the matters set forth in clauses (B)(1) and (2) of the PROVISO in clause (vii) of Section 6.08(a); and
(x) payment for the repurchase, redemption, retirement or cancelation of (x) Senior Subordinated Notes or (y) New Senior Notes in an aggregate amount not to exceed $10,000,000, provided that (A) such payment shall be made with cash and Cash Equivalents on the balance sheet of the Borrower, (B) immediately prior and after giving effect to any such payment, there shall be no Revolving Borrowings outstanding and (C) prior to any payment made in reliance on this clause (x), the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower certifying as to the matters set forth in clauses (A) and (B) above.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Allied Waste will not, and nor will not it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make declare or make, or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingRestricted Payment, or incur any payment obligation (contingent or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreementotherwise) that has a substantially similar effect to any of the foregoingdo so, except:
(i) payment of regularly scheduled interest Allied Waste may declare and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, pay dividends with respect to such Junior Financing, other than payments its capital stock payable solely in respect additional shares of any Junior Financing prohibited by the subordination provisions thereofits capital stock;
(ii) Permitted Refinancing Restricted Subsidiaries of Indebtedness the Borrower may declare and pay dividends ratably with respect to the extent permitted by Section 6.01their capital stock;
(iii) Allied Waste may make Restricted Payments, not exceeding an aggregate amount of $25,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans or in connection with incentive or compensation arrangements for current or former management or employees of the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of Borrower and its direct or indirect parentRestricted Subsidiaries;
(iv) [reserved]the Borrower or any Restricted Subsidiary may declare and make dividend payments to Allied Waste solely to the extent necessary for Allied Waste to pay for Taxes and to pay administrative expenses to conduct its business in accordance with Sections 5.01(b) and 6.10;
(v) [reserved]Allied Waste and its Restricted Subsidiaries may make Restricted Payments to the extent required by the terms of its joint venture or similar agreements in effect on the Restatement Effective Date and listed on Schedule 6.08; provided that immediately prior, and after giving effect to, such Restricted Payment, no Default or Event of Default shall have occurred and be continuing;
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary may pay cash dividends to Allied Waste in an amount sufficient to permit Allied Waste to pay cash dividends in respect of its capital stock and Allied Waste may pay cash dividends in respect of its capital stock; provided that is not a Loan Party pursuant to all cash dividend payments in accordance with this clause (viii).vi) are subject to the satisfaction of the following additional conditions on the date of such dividend payment and after giving effect thereto:
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. TC “SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.” \f C \l “2”
(a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to declare or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (iii) subject to Section 2.11(c), the Borrower and each Restricted Subsidiary may purchase, redeem or otherwise acquire its common Equity Interests with the proceeds received from the substantially concurrent issuance of new common Equity Interests, (iv) the Borrower and any of its Subsidiaries may make Restricted Payments dividends, distributions or payments with respect to awards granted to current or former employees, directors or independent contractors of any Loan Party or any of its Affiliates; provided that, no such dividends, distributions or payments shall be made in cash pursuant to this clause (iv) unless (x) both immediately prior to and after giving effect (including pro forma effect) thereto, no Default or Event of Default shall occurred and be continuing and (y) such dividends, distributions and payments shall be made in accordance with the Borrower’s 2020 Equity and Incentive Compensation Plan, effective as of May 6, 2020 (as amended, restated, supplemented or otherwise modified from time to time, except to the Borrower or any other Restricted Subsidiary; provided that in the case of extent any such Restricted Payment by amendment, restatement or modification would be materially adverse to the Lenders) or a Restricted Subsidiary new equity incentive plan that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made reasonably acceptable to the BorrowerAdministrative Agent (as amended, restated, supplemented or otherwise modified from time to time, except to the extent any Restricted Subsidiary such amendment, restatement or modification would be materially adverse to the Lenders) and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(iiv) the Borrower and each Restricted Subsidiary may make dividend payments other Restricted Payments not otherwise permitted under this Section 6.08(a), so long as the Payment Condition shall be satisfied with respect to such Restricted Payment. Notwithstanding the foregoing, and for the avoidance of doubt, (i) the conversion by holders of (including any cash payment upon conversion), or other distributions required payment of any principal or premium on, or required payment of any interest with respect to, any Permitted Convertible Notes, in each case, in accordance with the terms of the indenture governing such Permitted Convertible Notes, shall not constitute a Restricted Payment; provided that, to the extent both (a) the aggregate amount of cash payable solely upon conversion or payment of any Permitted Convertible Note (excluding any required payment of interest with respect to such Permitted Convertible Note and excluding any payment of cash in lieu of a fractional share due upon conversion thereof) exceeds the Equity Interests aggregate principal amount thereof and (other than Disqualified Equity Interestsb) such conversion or payment does not trigger or correspond to an exercise or early unwind or settlement of a corresponding portion of the Bond Hedge Transactions constituting Permitted Call Spread Swap Agreements relating to such Person;
Permitted Convertible Note (iii) [reserved];
(iv) non-cash repurchases including, for the avoidance of Equity Interests in Holdings (or any direct or indirect parent of Holdingsdoubt, the case where there is no Bond Hedge Transaction constituting a Permitted Call Spread Swap Agreement relating to such Permitted Convertible Note), the Borrower payment of such excess cash (any such payment, a “Cash Excess Payment”) shall constitute a Restricted Payment notwithstanding this clause (i); and (ii) any required payment with respect to, or required early unwind or settlement of, any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion Permitted Call Spread Swap Agreement, in each case, in accordance with the terms of the exercise price payable agreement governing such Permitted Call Spread Swap Agreement shall not constitute a Restricted Payment; provided that, to the extent cash is required to be paid under a Warrant Transaction as a result of the election of “cash settlement” (or substantially equivalent term) as the “settlement method” (or substantially equivalent term) thereunder by the Borrower (or its Affiliate) (including in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase and/or early unwind or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination payment of employment of such cash (any such Person or otherwise in accordance with any stock option or stock appreciation rights planpayment, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(la “Cash Settlement Payment”) in lieu of shall constitute a Restricted Payments permitted by Payment notwithstanding this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) ii). Notwithstanding the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of fundingforegoing, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu respect of Cash Excess Payments and/or Cash Settlement Payments so long as the issuance of fractional Equity Interests in connection Payment Condition shall be satisfied with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that respect thereto. Notwithstanding the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdingsforegoing, the Borrower may repurchase, exchange or any Restricted Subsidiary in respect induce the conversion of withholding or similar Taxes payable upon exercise of Equity Interests Permitted Convertible Notes by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, delivery of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock and/or a different series of Permitted Convertible Notes (which series (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the analogous date under the indenture governing the Permitted Convertible Notes that are so repurchased, exchanged or converted and (y) has terms, conditions and covenants that are, taken as a whole, no less favorable to the Borrower than the Permitted Convertible Notes that are so repurchased, exchanged or converted (as determined by the board of directors of the Borrower, or a committee thereof, in good faith)) (any such series of Permitted Convertible Notes, “Refinancing Convertible Notes”) and/or by payment of Restricted Payments to any direct or indirect parent company cash (in an amount that does not exceed the proceeds received by the Borrower from the substantially concurrent issuance of Holdings to fund a payment shares of dividends on such companythe Borrower’s common stock), following consummation of an IPO, of up to 6.0% per annum of stock and/or a Refinancing Convertible Notes plus the net cash proceeds of such IPO proceeds, if any, received by or contributed the Borrower pursuant to the Borrower, other than public offerings with respect related exercise or early unwind or termination of the related Permitted Call Spread Swap Agreements pursuant to the IPO Entity’s common stock registered on Form S-8immediately following proviso); provided that, substantially concurrently with, or a commercially reasonable period of time before or after, the related settlement date for the Permitted Convertible Notes that are so repurchased, exchanged or converted, the Borrower shall (and
, for the avoidance of doubt, shall be permitted under this Section 6.08(a) to) exercise or unwind or terminate early (xvwhether in cash, shares or any combination thereof) the portion of the Permitted Call Spread Swap Agreements, if any, corresponding to such Permitted Convertible Notes that are so long as no Event of Default shall have occurred and be continuing repurchased, exchanged or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000converted.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any voluntary payment or other voluntary distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any voluntary payment or other voluntary distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers payments as and when due in respect of any Indebtedness permitted to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect be incurred pursuant to such Junior FinancingSection 6.01, other than payments in respect of any Junior Financing Subordinated Indebtedness to the extent prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;; and
(iv) [reserved];
payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness (v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower extent such sale or a Restricted Subsidiary or transfer is permitted by the prepayment terms of Permitted Refinancing of such Indebtedness with Section 6.05). Notwithstanding the proceeds of any other Junior Financing; providedforegoing, that, no Loan Party this Section 6.08(b) shall make any prepayment of Junior Financing owed not apply to any Restricted Subsidiary that is not a Loan Party direct or indirect prepayment, redemption, repurchase, conversion, settlement, amendment, modification, supplement or adjustment with respect to any Permitted Convertible Notes pursuant to this clause (viii)their terms unless such prepayment, redemption, repurchase, conversion, settlement, amendment, modification, supplement or adjustment results from a default thereunder or an event of the type that constitutes an Event of Default.
Appears in 1 contract
Samples: Credit Agreement (TimkenSteel Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and will not permit any Restricted Subsidiary of its Core Subsidiaries to, make or pay, directly or indirectly, any Restricted Payment, exceptunless:
(a) such Restricted Payment is a payment of interest on Subordinated Indebtedness that (1) is due and payable and (2) when made is permitted to be made under the subordination terms contained in the instrument evidencing such Subordinated Indebtedness,
(b) such Restricted Payment is a payment of principal of Subordinated Indebtedness that (1) is due and payable, (2) was counted as Fixed Charges at the time of the incurrence of such Subordinated Indebtedness pursuant to Section ------- 6.01 and (3) when made is permitted to be made under the subordination terms ---- contained in the instrument evidencing such Subordinated Indebtedness,
(c) at the time of and after giving effect to such Restricted Payment,
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would shall result from the making of such payment;Restricted Payment,
(Cii) the proceeds Cash Flow to Fixed Charges Ratio for the previous four fiscal quarters of the Borrower is equal to or greater than 1.7 to 1.0, and
(iii) The projected Cash Flow to Fixed Charges Ratio (determined on a pro forma basis which shall be used is (A) consistent with the then applicable power marketing plan delivered pursuant to Section 4.01(j) or 5.14, as --------------- ---- applicable, or (B) if no such power marketing plan is available, consistent with projections prepared by Holdings to pay ordinary course administrativethe Borrower in good faith based on assumptions consistent in all material respects with the relevant contracts and agreements, overhead historical operations, and related the Borrower's good faith projections of future revenues and projections of operating and maintenance expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of for the Borrower and its Subsidiaries;
(DCore Subsidiaries in light of the then existing or reasonably expected regulatory and market environments in the markets in which its assets is or will be operated and upon the assumption that there will be no early redemption or prepayments of Indebtedness other than early redemptions or prepayments occurring concurrently with such incurrence of Indebtedness) for each of the two following periods of four full fiscal quarters shall be equal to finance any Investment made by Holdings or greater than 1.7 to 1.0; provided further that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Default or Event of Default shall have occurred and be continuing or would shall result therefromfrom the making of such Restricted Payment, additional Restricted Payments in an amount this Section 6.05 shall not to exceed $3,000,000.
(b) The Borrower will notprohibit the redemption, and will not permit any Restricted Subsidiary torepurchase, make or agree to pay or make------------ retirement, directly or indirectly, any payment defeasance or other distribution (whether acquisition of any Subordinated Indebtedness of the Borrower or of any Equity Interests in cash, securities or other property) of or the Borrower in respect of principal of or interest on any Junior Financingexchange for, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account out of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any Net Proceeds of the foregoing, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests substantially concurrent sale (other than Disqualified to a Subsidiary) of, Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to Interests in the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Borrower.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Holdings may declare and pay dividends with respect to its capital stock payable solely in additional shares of its common stock, (ii) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to their capital stock, (iii) provided no Event of Default is continuing or would result therefore, Holdings and the Borrower may make Restricted Payments pursuant to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends plans or other distributions on the stock of the Borrower to Holdings paid and declared solely benefit plans for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise management or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations employees of Holdings, the Borrower and its Restricted Subsidiaries; provided that the amount thereof, taken together with any payments or transfers of cash, assets or debt securities pursuant to clause (f) of Section 6.09, do not exceed $15,000,000 in any fiscal year, (3iv) [reserved] provided no Event of Default is continuing or would result therefrom, the Borrower may pay dividends to Holdings at any time in such amounts as may be necessary to permit Holdings to pay its expenses and liabilities incurred in the ordinary course (4other than payments in respect of Indebtedness or Restricted Payments), (v) amounts due provided no Event of Default is continuing or would result therefrom, the Borrower may make Restricted Payments to Holdings, and payable pursuant Holdings may, in turn, make such Restricted Payments to any investor management agreement entered into the Parent (x) if the Leverage Ratio (determined on a pro forma basis after giving effect to such Restricted Payment) as of the last day of the period of four consecutive fiscal quarters most recently ended on or prior to the date of such Restricted Payment is less than 4.00 to 1.00 or (y) otherwise, in an aggregate amount not to exceed 50% of Quarterly Excess Cash Flow with respect to each fiscal quarter of the Sponsor Borrower ending on or after September 30, 2007 in which Quarterly Excess Cash Flow is greater than $0 minus 100% of the Effective Date absolute value of Quarterly Excess Cash Flow with respect to each fiscal quarter of the Borrower ending on or after September 30, 2007 in which Quarterly Excess Cash Flow is less than $0 minus the amount of any other Designated Excess Cash Expenditures made with such Quarterly Excess Cash Flow, (vi) Restricted Payments in amounts as shall be necessary to make Tax Payments; provided that all Restricted Payments made pursuant to this clause (vi) are used by the Parent or Holdings for the purpose specified in this clause (vi) within 30 days of receipt thereof, (vii) provided no Event of Default is continuing or would result therefrom, the Borrower may from time to time pay cash dividends to Holdings and Holdings may, in turn, use the proceeds thereof to pay cash dividends to the Parent, in each case in an amount not in excess of the regularly scheduled cash interest payable during the next period of 30 days on any Qualifying Parent Indebtedness (including Base Ultimate Parent QPI and Base Parent QPI), provided, however, that (A) any such dividends relating to any such cash interest payment must be paid not earlier than 30 days prior to the date when such cash interest is required to be paid by the Parent or the Ultimate Parent, as applicable, and the proceeds must (except to the extent prohibited by applicable subordination provisions) be applied by the Parent or the Ultimate Parent, as applicable, to the payment of such interest when due, (B) no payment of dividends may be made pursuant to this clause (vii) in respect of Indebtedness of the Parent or Ultimate Parent, as applicable, unless at the time of the incurrence of such Indebtedness (other than Base Parent QPI or Base Ultimate Parent QPI outstanding on the Closing Date), and after giving effect thereto, the QPI Issuance Conditions were satisfied, (C) no dividends may be made pursuant to this clause (vii) in respect of the Indebtedness described in clause (a)(ii) of the definition of Existing Parent Indebtedness and (D) the Borrower and its Subsidiaries shall be in Pro Forma Compliance after giving effect to the payment of any such dividends pursuant to this clause (vii) and (viii) provided no Event of Default is continuing or would result therefrom, the Borrower may make Restricted Payments to Holdings, and Holdings may, in turn, make such Restricted Payments to the Parent in an aggregate amount not to exceed $1,000,000 in 10,000,000 during any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Parent, Holdings and the Borrower will not, and nor will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Senior Subordinated Debt, Permitted Subordinated Indebtedness, Qualifying Parent Indebtedness, Non-Cash Pay Debt or other subordinated Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]prepayment of Capital Lease Obligations in an aggregate cumulative amount from and after the Closing Date not exceeding $5,000,000;
(vi) [reserved]provided no Event of Default is continuing or would result therefrom, Optional Repurchases of other Indebtedness (x) if the Leverage Ratio (determined on a pro forma basis after giving effect to such Optional Repurchase) as of the last day of the period of four consecutive fiscal quarters most recently ended on or prior to the date of such Optional Repurchase is less than 4.00 to 1.00 or (y) involving cumulative expenditures in any fiscal year not in excess of an amount equal to the Borrower’s Portion of Excess Cash Flow for the immediately preceding fiscal year less the amount of other Designated Excess Cash Expenditures made with such Borrower’s Portion of Excess Cash Flow;
(vii) [reserved]provided no Event of Default is continuing or would result therefrom, Optional Repurchases of other Indebtedness made with Designated Equity Proceeds;
(viii) redemptions of the Senior Unsecured Notes and the Senior Subordinated Notes contemplated by Section 4.01(b); and
(viiiix) prepayment provided no Event of Junior Financing owed to Default is continuing or would result therefrom, Optional Repurchases of other Indebtedness made by the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness Parent with the proceeds of the issuance of Equity Interests by the Parent to the Ultimate Parent or capital contributions from the Ultimate Parent to the Parent.
(c) The Parent, Holdings and the Borrower will not, and will not permit any Subsidiary to, furnish any funds to, make any Investment in, or provide other consideration to any other Junior Financing; providedPerson (including an Unrestricted Subsidiary) for purposes of enabling such Person to, thator otherwise permit any such Person to, no Loan Party shall make any prepayment Restricted Payment or other payment or distribution restricted by this Section that could not be made directly by Holdings or the Borrower in accordance with the provisions of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Section.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or pay, directly or indirectly, declare, order, make or set apart any sum for or pay any Restricted Payment, except:
(i) each Restricted Subsidiary may to make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that dividends payable solely in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant same class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(ii) to make dividends or other distributions payable to the Credit Parties (directly or indirectly through its Subsidiaries);
(iii) [reserved]after an offering of Qualified Equity Interests completed after the Closing Date, an amount equal to 6% per annum of the Net Cash Proceeds received by (or contributed to) the Borrower and its Restricted Subsidiaries from any such offering(s) completed after the Closing Date;
(iv) non-cash repurchases so long as no Event of Equity Interests in Holdings (Default has occurred and is continuing at the time of making such Restricted Payment or any direct or indirect parent of Holdings)would immediately result therefrom, the Borrower or any may make Restricted Subsidiary deemed Payments in the form of cash dividends payable with respect to occur upon exercise of stock options or warrants if such Equity Interests represent a portion shares of the exercise price payable Borrower’s Series A Convertible Preferred Stock in connection an amount not to exceed $2,000,000 per annum provided that, on a Pro Forma Basis, immediately after giving effect to such Restricted Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal quarter for which financial statements are required to be delivered (or are actually delivered, if earlier) prior to such date and for the Test Period ending on such date, is less than or equal to 0.25:1.00 less than the Total Net Leverage Ratio required to then comply with each of the exercise of such options or warrantsFinancial Covenants then in effect;
(v) so long as no Event of Default has occurred and is continuing at the time of making such Restricted Payment or would immediately result therefrom, the Borrower may make additional Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 the Available Amount as of such date; provided that, solely to the extent that such Restricted Payment is made with any portion of the Available Amount described in any clause (a) of the definition thereof, on a Pro Forma Basis, immediately after giving effect to such Restricted Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal year of Holdingsquarter for which financial statements are required to be delivered (or are actually delivered, if earlier) prior to such date and for the Test Period ending on such date, is less than or equal to 3.00:1.00;
(vi) so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have has occurred and be is continuing or would result from such payment;
(C) at the proceeds time of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) making such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shallor would immediately result therefrom, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make additional unlimited Restricted Payments Payments; provided that, on a Pro Forma Basis, immediately after giving effect to allow Holdings to (a) pay cash in lieu such Restricted Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the issuance last day of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines most recent fiscal quarter for which financial statements are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant delivered (or their respective controlled Affiliates or permitted transfereesare actually delivered, if earlier) prior to such date and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of for the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends Test Period ending on such company’s common stock)date, following consummation of an IPO, of up is less than or equal to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-81.50:1.00; and
(xvvii) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments to pay dividends and/or redeem shares of common stock in an aggregate amount not to exceed $3,000,00035,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment prepayment (including voluntary and mandatory prepayments), repurchase or other distribution redemption (whether in cash, securities or other property) of or in respect of principal or any interest, fees or other amounts of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of the principal of any Junior Financing, or any other payment (including any payment under any Swap Agreement) Financing that has a substantially similar effect to any of the foregoing, in each case, prior to the scheduled maturity thereof (excluding any payments of regularly scheduled principal, interest, fees, expenses and indemnification obligations in compliance with the terms of this Agreement) (any of the foregoing, a “Restricted Debt Payment”), except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing (other than Subordinated Indebtedness) not otherwise prohibited by the subordination provisions thereofterms of this Agreement, including mandatory prepayments made with Declined Proceeds;
(ii) Permitted Refinancing Refinancings of Indebtedness to the extent permitted by Section 6.016.1;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe Borrower;
(iv) [reserved]so long as no Event of Default has occurred and is continuing at the time of making such Restricted Debt Payment or would immediately result therefrom, additional Restricted Debt Payments in respect of any Junior Financings in an aggregate amount not to exceed the Available Amount as of such date; provided that, solely to the extent that such Restricted Debt Payment is made with any portion of the Available Amount described in clause
(a) of the definition thereof, on a Pro Forma Basis, immediately after giving effect to such Restricted Debt Payment , the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal quarter for which financial statements are required to be delivered (or are actually delivered, if earlier) prior to such date and for the Test Period ending on such date, is less than or equal to 3.00:1.00;
(v) [reserved]so long as no Event of Default has occurred and is continuing at the time of making such Restricted Debt Payment or would immediately result therefrom, additional unlimited Restricted Debt Payments ; provided that, on a Pro Forma Basis, immediately after giving effect to such Restricted Debt Payment, the use of proceeds thereof and all related pro forma adjustments, the Total Net Leverage Ratio, recomputed as of the last day of the most recent fiscal quarter for which financial statements are required to be delivered (or are actually delivered, if earlier) and for the Test Period ending on such date, is less than or equal to 1.50:1.00;
(vi) [reserved];
(vii) [reserved]additional Restricted Debt Payments in an aggregate amount not to exceed $10 million; and
(viiiA) prepayment Restricted Debt Payments with Eligible Equity Proceeds, to the extent such Eligible Equity Proceeds have not otherwise been applied to make any Investment, Restricted Payment or Restricted Debt Payment hereunder and do not increase the Available Amount, (B) the conversion of all or any portion of any Junior Financing owed into Qualified Equity Interests of the Borrower, (C) to the Borrower or extent constituting a Restricted Subsidiary or the prepayment Debt Payment , payment-in-kind of Permitted Refinancing of such Indebtedness interest with the proceeds of respect to any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant permitted under Section 6.1, and (D) Restricted Debt Payments as part of an “applicable high yield discount obligation” catch up payment with respect to this clause (viii)Indebtedness permitted by Section 6.1.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Holdings may declare and pay dividends with respect to its capital stock payable solely in additional shares of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock, (iii) the Borrower may pay management fees to Granaria or any of its Affiliates in an aggregate amount not to exceed $1,750,000 during any fiscal year and reimburse Granaria or any of its Affiliates for their reasonable out-of-pocket expenses relating to their management of Holdings, (iv) the Borrower or any Subsidiary may make Restricted Subsidiary Payments, in an aggregate amount not to exceed $1,000,000 during any fiscal year, pursuant to and in accordance with the stock plans of employees or directors who terminate their employment with the Borrower or such Subsidiary, (v) the Borrower may make Restricted Payments to Holdings at such times and in such amounts as shall be necessary to permit Holdings to (A) pay Preferred Dividends to the Borrower or any extent permitted by clause (vi) of this Section 6.08(a) and (B) discharge its permitted liabilities (other Restricted Subsidiary; provided that than in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary respect of the BorrowerExisting Preferred Stock or Refinancing Preferred Stock) during any fiscal year and (vi) Holdings may (1) make Restricted Payments for the purpose of purchasing, such Restricted Payment is made redeeming or refinancing the Existing Preferred Stock solely with the proceeds of Refinancing Preferred Stock issued pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Section 6.01(c) or common Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner shares of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments Existing Preferred Stock purchased or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made redeemed pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (vvi) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may immediately be increased canceled by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain declare and any allowable federal income tax deduction for state pay Preferred Dividends, provided that, immediately prior to and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings immediately after giving effect to such parentpayment of Preferred Dividends, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and or be continuing or would result therefrom, additional Restricted Payments in an amount as of such date and (y) the Leverage Ratio shall not exceed 3.00 to exceed $3,000,0001.00 as of such date.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Subordinated Debt prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]payments in respect of the repurchase of Subordinated Debt that remains outstanding after the Effective Date (it being understood and agreed that any Subordinated Debt purchased pursuant to this clause (v) shall immediately be canceled by the Borrower);
(vi) [reserved]prepayment of the Industrial Revenue Bonds;
(vii) [reserved]prepayment of BV Loans in an aggregate principal amount of up to $5,000,000; provided that no Event of Default shall have occurred and be continuing; and
(viii) prepayment payments in respect of Junior any Permitted Receivables Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness in accordance with the proceeds terms of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)the Permitted Receivables Documents.
Appears in 1 contract
Samples: Credit Agreement (Epmr Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary or any Intermediate Parent to, make declare or paymake, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted SubsidiarySubsidiary of the Borrower; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));Interests; 104 Blue Bird Body Company Credit Agreement
(ii) Holdings, any Intermediate Parent, the Borrower and each Restricted Subsidiary may declare and make dividend payments or other distributions payable solely in the Qualified Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved]payment of (A) up to an aggregate amount of $250,000,000 for the Special Dividend, portions of which, up to an aggregate amount not to exceed $30,000,000 (a “Partial Dividend Payment”), may be paid within 60 days after the Effective Date and (B) and payments not to exceed $2,000,000 in the aggregate in respect of withholding tax obligations made thereon (such payments being referred to in the foregoing clauses (A) and (B) being collectively as the “Special Dividend Payments”); provided, that after giving Pro Forma Effect to each such Special Dividend Payment, whether made in whole on the Effective Date or as one or more Partial Dividend Payments following the Closing Date, (1) the Borrower shall have available unrestricted cash and Cash Equivalents reflected on its balance sheet in an amount not less than $15,000,000; (2) no Default or Event of Default shall exist or result therefrom, (3) the Administrative Agent shall have received (x) a Solvency Certificate from a Responsible Financial Officer certifying as to the solvency of the Borrower and its Restricted Subsidiaries on a consolidated basis after giving effect to such Special Dividend Payment or Partial Dividend Payment, as the case may be, (y) a certificate from a Responsible Officer certifying that all the representations and warranties set forth in this Agreement and the other Loan Documents are true and correct as of such date and certifying as to the matters set forth in clauses (1) and (2) of this proviso and (z) certified copies of board resolutions (to the extent not already covered in such resolutions provided pursuant to Section 4.01(d) as determined in the Administrative Agent’s reasonable discretion) approving the payment of such Special Dividend Payment or Partial Dividend Payment, as applicable;
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has under Section 7.01(a), (b), (h) or (i) shall have occurred and is be continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock options or warrants or stock appreciation rights or similar securities issued with respect to any of such Equity Interests or any phantom equity or similar plan relating to its Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), ) held directly or indirectly by current or former officers, managers, members of the Board of Directors or consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its the Restricted Subsidiaries, in each case (x) upon the death, disability, retirement or termination of employment of any such Person or (y) otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or agreements, equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances agreement, or phantom equity plan or similar plan relating to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause its Equity Interests;
(v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) Intermediate Parent, the Borrower and its the Restricted Subsidiaries may make Restricted Payments in cash or Cash Equivalents to Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary:
(A) cash dividends the proceeds of which shall be used by Holdings, any Intermediate Parent, the Borrower or other distributions on any Restricted Subsidiary to pay its Tax liability to the stock relevant jurisdiction in respect of consolidated, combined, unitary or affiliated returns attributable to the income of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdingsits Restricted Subsidiaries; provided that payments hereunder attributable Restricted Payments made pursuant to this clause (a)(v)(A) shall not exceed the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to Tax liability that the Borrower and/or its the relevant Restricted Subsidiaries;Subsidiaries (as applicable) would have incurred were such Taxes determined as if such entity(ies) were a stand-alone taxpayer or a stand-alone group; 105 Blue Bird Body Company Credit Agreement
(B) the proceeds of which shall be used by Holdings Holdings, any Intermediate Parent, the Borrower or any Restricted Subsidiary to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved]its operating expenses incurred in the ordinary course of business and other corporate overhead costs and expenses (including administrative, (2legal, accounting and similar expenses payable to third parties) any that are reasonable and customary and incurred in the ordinary course of business, and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors officers of Holdings (or any parent thereof) directly ), in each case to the extent attributable to the ownership or operations of Holdings, the Borrower and its the Restricted Subsidiaries, (3) [reserved] Subsidiaries and (42) amounts fees and expenses (x) due and payable pursuant by any of the Restricted Subsidiaries and (y) otherwise permitted to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from paid by such paymentRestricted Subsidiary under this Agreement;
(C) the proceeds of which shall be used by Holdings or any Intermediate Parent to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) and other fees, Taxes and expenses required to extent directly attributable to the operations or ownership of the Borrower and maintain its Subsidiariescorporate existence;
(D) to finance any Investment made the proceeds of which shall be used by Holdings that, if made to make Restricted Payments permitted by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.126.06(a)(iv);
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any unsuccessful equity or debt offering not prohibited permitted by this Agreement;; and
(F) [reserved];
(G) the proceeds of which are shall be used to make concurrent payments permitted by clauses clause (b)(iv) and (b)(v) of this Section 6.076.06;
(vi) in addition to the foregoing Restricted Payments and so long as no Event of Default shall have occurred and be continuing or would result therefrom and Holdings would be in compliance with a Total Net Leverage Ratio not to exceed 1.75 to 1.00, on a Pro Forma Basis as of the end of the most recently ended Test Period, Restricted Payments in an aggregate amount not to exceed the Available Amount at such time;
(vii) [reserved];payments permitted under Section 6.07; and
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified or with proceeds from substantially concurrent equity contributions or issuances of new Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any other Restricted Subsidiary or any Intermediate Parent to, make or agree to pay or makepay, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:: 106 Blue Bird Body Company Credit Agreement
(i) payment of regularly scheduled or required interest payments as, in the form of payment and principal payments, mandatory offers when due in respect of any Indebtedness to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to the extent such Junior Financing, other than payments in respect of any Junior Financing prohibited are permitted by the subordination provisions thereof;
(ii) Permitted Refinancing refinancings, refundings, renewals, modifications or exchanges of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;parent companies or any Intermediate Parent; and
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment so long as no Event of Default shall have occurred and be continuing or would result therefrom and Holdings would be in compliance with a Total Net Leverage Ratio not to exceed 2.25 to 1.00, on a Pro Forma Basis as of the end of the most recently ended Test Period, prepayments, redemptions, purchases, defeasances and other payments in respect of Junior Financing owed Financings prior to their scheduled maturity in an aggregate amount not to exceed the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of Available Amount at such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)time.
Appears in 1 contract
Samples: Credit Agreement (Blue Bird Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares of its common stock or Qualified Preferred Stock, or make cash payments in lieu of fractional shares, (ii) Subsidiaries (other than those directly owned, in whole or part, by the Borrower) may declare and pay dividends ratably with respect to their common stock, (iii) the Borrower may declare and pay cash dividends with respect to its common stock and effect repurchases, redemptions or other Restricted Subsidiary Payments with respect to its common stock, together in an aggregate amount in any fiscal year of the Borrower not to exceed 50% of Consolidated Net Income (if positive) for the immediately preceding fiscal year of the Borrower; provided that immediately prior and after giving effect to any such payment no Default or Event of Default shall have occurred and be continuing and, immediately after giving effect to any such payment, the Borrower shall have Revolver Availability of more than $100,000,000, (iv) the Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any fiscal year of the Borrower with respect to any Qualified Preferred Stock; provided that (x) immediately prior and after giving effect to any such payment, no Default or Event of Default shall have occurred and be continuing and (y) only so long as a Financial Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended on or prior to the date of such payment, calculated on a pro forma basis as if such payment were made on the last day of such period (and excluding any such payments previously made pursuant to this clause during such four quarter period but attributed for purposes of this calculation to the last day of a prior period which day does not occur in such four quarter period) is not less than the ratio applicable to such period of four fiscal quarters under Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments consisting of the repurchase or other acquisition of shares of, or options to purchase shares of, capital stock of the Borrower or any of its Subsidiaries from employees, former employees, directors or former directors of the Borrower or any Subsidiary (or their permitted transferees), in each case pursuant to stock option plans, stock plans, employment agreements or other Restricted Subsidiaryemployee benefit plans approved by the board of directors of the Borrower; provided that in no Default has occurred and is continuing; and provided further that the case aggregate amount of such Restricted Payments made after the Original Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay cash dividends to the Borrower; provided that the Borrower shall, within a reasonable time following receipt of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary payment, use all of the Borrower, such Restricted Payment is made proceeds thereof for a purpose set forth in Section 5.10(b) or a Refinancing Amendment (including the payment of dividends required or permitted pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under this Section 6.04(c6.08(a));
, (iivii) the Borrower and each Restricted Subsidiary the Subsidiaries may make dividend payments or other distributions payable solely in declare and pay cash dividends with respect to the Equity Interests (other than Disqualified Equity Interestsset forth on Schedule 6.08(a) to the extent, and only to the extent, required pursuant to the terms of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of or any other agreement in effect on the exercise price payable in connection with the exercise of such options or warrants;
Effective Date and (vviii) so long as no Default or Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Borrower may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire redeem or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members shares of the Board of Directors or employees Borrower’s and/or its Subsidiaries’ (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributeesincluding Rite Aid Lease Management Company’s) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that Preferred Stock (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies solely with Net Cash Proceeds received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries from issuances of its common stock after the Original Restatement Effective Date;
, provided that any such repurchase or redemption is effected within 150 days after the receipt of such proceeds or (viB) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or with other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable funds available to the Borrower and its Subsidiaries for any taxable yearif, (1) calculated by multiplying such income by the maximum combined tax rate applicable immediately after giving effect to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct redemption or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdingsrepurchase, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds Revolver Availability of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other more than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000100,000,000.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior FinancingIndebtedness (which, or for purposes of this Section 6.08(b), shall include any other payment (Indebtedness, including any payment under any Swap Agreement) that has a substantially similar effect the 2015 8.5% Convertible Notes, incurred pursuant to any of the foregoingclauses (i) through (xx) of Section 6.01(a)), except:
(i) payment payments or prepayments or exchanges of Indebtedness (including Refinancing Indebtedness) created under the Senior Loan Documents (including any Refinancing Amendment executed in accordance with Section 6.01(c)) and prepayments, repurchases or redemptions of Additional Senior Debt made in accordance with Section 2.11(c);
(ii) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness permitted pursuant to the extent permitted by Section 6.016.01(a);
(iii) the conversion prepayments of any Junior Financing Indebtedness permitted pursuant to Equity Interests clause (other than Disqualified Equity Interestsvii), (viii) or (ix) of Holdings Section 6.01(a) with the proceeds of, or any in exchange for, Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of its direct or indirect parentSection 6.01(a), respectively;
(iv) [reserved]payments of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii).
Appears in 1 contract
Samples: Credit Agreement (Rite Aid Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Allied Waste will not, and nor will not it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make declare or make, or agree to pay or make, directly or indirectly, any payment Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except (i) Allied Waste may declare and pay dividends with respect to its capital stock payable solely in additional shares of its capital stock, (ii) Restricted Subsidiaries of the Borrower may declare and pay dividends ratably with respect to their capital stock, (iii) Allied Waste may make Restricted Payments, not exceeding an aggregate amount of $25,000,000 during any fiscal year, pursuant to and in accordance with the stock option plans or other distribution benefit plans or in connection with incentive or compensation arrangements for current or former management or employees of the Borrower and its Restricted Subsidiaries, (whether iv) the Borrower or any Restricted Subsidiary may declare and make dividend payments to Allied Waste solely to the extent necessary for Allied Waste to pay for taxes and to pay administrative expenses to conduct its business in cashaccordance with Sections 5.01B(b) and 6.10B, securities or other property(v) of or Allied Waste may declare and pay dividends in respect of principal the Sponsor Preferred Stock payable solely in additional shares of or interest on any Junior Financing, or any payment Sponsor Preferred Stock (or other distribution capital stock, as provided therein) and (whether in cash, securities or other property), including any sinking fund vi) Allied Waste and its Restricted Subsidiaries may make Restricted Payments to the extent required by the terms of its joint venture or similar depositagreements in effect on the date hereof and listed on Schedule 6.08A; provided that immediately prior, and after giving effect to, such Restricted Payment, no Senior Event of Default shall have occurred and be continuing.
(b) Allied Waste will not nor will it permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on account of the purchase, redemption, retirement, acquisition, cancellation or termination ability of any Junior Financing, such Subsidiary to (1) pay any dividends or make any other distributions on its capital stock or any other payment ownership interest or (including 2) make or repay any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase loans or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed advances to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing parent of such Indebtedness with the proceeds of any other Junior Financing; providedSubsidiary, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii).except for:
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary Subsidiaries may make Restricted Payments declare and pay dividends ratably with respect to their capital stock (A) to shareholders other than FCX, (B) to FCX to the Borrower or any other Restricted Subsidiary; provided that extent the proceeds of such dividends are applied to pay operating expenses in the case ordinary course of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerbusiness, such Restricted Payment is made and (C) to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) FCX so long as (1) no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this under clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (ha) or (ib) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or would (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such payment;
(C) the proceeds of which dividends shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with paid during the closing pendency of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any Event of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;Default,
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvii) so long as no Event of Default shall have occurred and be continuing (or would shall result therefromfrom the payment thereof), additional Restricted Payments FCX may pay regularly scheduled quarterly dividends in respect of its preferred stock issued and outstanding on the Effective Date and effect regularly scheduled mandatory redemptions of its preferred stock issued and outstanding on the Effective Date, in each case, to the extent and in the amounts required by the terms of such preferred stock as in effect on the Effective Date,
(iii) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), FCX may, consistent with its dividend practices as of the Effective Date, and subject to the Incurrence Test, declare and pay dividends on its shares of common stock (and on shares of common stock issued upon the conversion of or in exchange for shares of FCX’s 5 1/2% Convertible Perpetual Preferred Stock outstanding on the Effective Date) in an amount in respect of any fiscal quarter not to exceed $3,000,0000.3125 per share of FCX’s common stock (adjusted as applicable to eliminate the effect of stock dividends, stock splits, reverse stock splits and other transactions in respect of such shares of common stock, and payable in respect of any shares of common stock received pursuant to any such stock dividend, stock split, reverse stock split or other transaction) (it being understood that Restricted Payments made in reliance on this clause (iii) in respect of shares of FCX’s common stock issued or sold after the Effective Date (or in respect of shares received in stock dividends, stock splits, reverse stock splits or other transactions in respect of such shares of common stock) involving either (x) a receipt of cash proceeds that increased the Restricted Uses Basket or (y) the receipt of assets in consideration for such common stock shall constitute Restricted Uses and shall reduce the Restricted Uses Basket (which reduction may be to less than zero)), and
(iv) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), and subject to the Incurrence Test, FCX may make Restricted Payments in cash in any amounts to the extent that, immediately after giving effect thereto (and to any expenditure of cash required thereby), the Restricted Uses would not be greater than the Restricted Uses Basket.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents and payment of Ratable FCX Obligations, Ratable Cyprus Obligations and Ratable PD Obligations;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
6.01(a) (iii) including, without limitation, the conversion refinancing of any Junior Financing to Equity Interests (Indebtedness, other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe Senior Notes, with Indebtedness permitted under Section 6.01(a)(xi));
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment prepayments of Junior Financing Indebtedness owed to the Borrower or FCX by a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any a Restricted Subsidiary by FCX or another Restricted Subsidiary, provided that prepayments of Indebtedness owed to a Restricted Subsidiary that is not a Loan Party pursuant shall be permitted only to this the extent no Event of Default has occurred and is continuing at the time of such prepayment, except that such prepayments shall be permitted (A) to the extent the proceeds of such prepayments are applied to pay operating expenses or to make Capital Expenditures in the ordinary course of business, and (B) to the extent the proceeds of such prepayments are applied to pay scheduled debt service of such Restricted Subsidiary so long as (1) no Event of Default under clause (a) or (b) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such prepayments shall not be permitted to be paid during the pendency of such Event of Default;
(vi) prepayments of any Project Financing to the extent made by the applicable Project Financing Subsidiary with cash from the operations of such Project Financing Subsidiary;
(vii) payments of Indebtedness (other than Indebtedness referred to in clause (viii) below) that are not permitted by clauses (i)-(vi) of this Section 6.08(b) if and to the extent that after giving effect to any such payments, the Restricted Uses would not be greater than the Restricted Uses Basket; and
(viii) payment of Indebtedness created under the Restated Credit Agreement and the “Loan Documents” thereunder, provided that no Indebtedness may be prepaid under the Restated Credit Agreement (A) at any time that any Loan or LC Disbursement is outstanding and (B) if there is outstanding any Letter of Credit or Letters Credit in an aggregate outstanding amount smaller than such prepayment, unless such Letter of Credit or Letters of Credit are redesignated as Letters of Credit under the Restated Credit Agreement in accordance with Section 2.05(a)(iii).
Appears in 1 contract
Samples: Credit Agreement (Freeport McMoran Copper & Gold Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares of its common stock or Qualified Preferred Stock, (ii) Subsidiaries (other than those directly owned, in whole or part, by the Borrower) may declare and pay dividends ratably with respect to their common stock, (iii) the Borrower may declare and pay cash dividends with respect to its common stock and effect repurchases, redemptions or other Restricted Subsidiary Payments with respect to its common stock, together in an aggregate amount in any fiscal year of the Borrower not to exceed 50% of Consolidated Net Income (if positive) for the immediately preceding fiscal year of the Borrower; provided that immediately prior and after giving effect to any such payment no Default or Event of Default shall have occurred and be continuing and, immediately after giving effect to any such payment, the Borrower shall have Revolver Availability of more than $100,000,000, (iv) the Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any fiscal year of the Borrower with respect to the Series E Preferred Stock, Series I Preferred Stock or any other Qualified Preferred Stock; provided that (x) immediately prior and after giving effect to any such payment, no Default or Event of Default shall have occurred and be continuing and (y) only so long as a Financial Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended on or prior to the date of such payment, calculated on a pro forma basis as if such payment were made on the last day of such period (and excluding any such payments previously made pursuant to this clause during such four quarter period but attributed for purposes of this calculation to the last day of a prior period which day does not occur in such four quarter period) is not less than the ratio applicable to such period of four fiscal quarters under Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments consisting of the repurchase or other acquisition of shares of, or options to purchase shares of, capital stock of the Borrower or any of its Subsidiaries from employees, former employees, directors or former directors of the Borrower or any Subsidiary (or their permitted transferees), in each case pursuant to stock option plans, stock plans, employment agreements or other Restricted Subsidiaryemployee benefit plans approved by the board of directors of the Borrower; provided that in no Default has occurred and is continuing; and provided further that the case aggregate amount of such Restricted Payments made after the Original Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay cash dividends to the Borrower; provided that the Borrower shall, within a reasonable time following receipt of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary payment, use all of the Borrower, such Restricted Payment is made proceeds thereof for a purpose set forth in Section 5.10(b) (including the payment of dividends required or permitted pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under this Section 6.04(c6.08(a));
, (iivii) the Borrower and each Restricted Subsidiary the Subsidiaries may make dividend payments or other distributions payable solely in declare and pay cash dividends with respect to the Equity Interests (other than Disqualified Equity Interestsset forth on Schedule 6.08(a) to the extent, and only to the extent, required pursuant to the terms of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of or any other agreement in effect on the exercise price payable in connection with the exercise of such options or warrants;
Effective Date and (vviii) so long as no Default or Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Borrower may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire redeem or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members shares of the Board of Directors or employees Borrower’s and/or its Subsidiaries’ (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributeesincluding Rite Aid Lease Management Company’s) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that Preferred Stock (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies solely with Net Cash Proceeds received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries from issuances of its common stock after the Original Restatement Effective Date;
, provided that any such repurchase or redemption is effected within 150 days after the receipt of such proceeds or (viB) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or with other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable funds available to the Borrower and its Subsidiaries for any taxable yearif, (1) calculated by multiplying such income by the maximum combined tax rate applicable immediately after giving effect to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct redemption or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdingsrepurchase, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds Revolver Availability of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other more than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000100,000,000.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment payments or prepayments of Indebtedness created under the Senior Loan Documents;
(ii) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness permitted pursuant to Section 6.01(a);
(iiiii) Permitted Refinancing prepayments of Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of Section 6.01(a) with the proceeds of Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of Section 6.01(a);
(iv) payments of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) provided no Default has occurred and is continuing or would result therefrom, Optional Debt Repurchases of Inside Indebtedness and, to the extent permitted by Section 6.01;
paragraph (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interestsc) of Holdings or any this Section, Optional Debt Repurchases of its direct or indirect parent;
(iv) [reserved];
(v) [reserved]Outside Indebtedness;
(vi) [reserved]repurchases, exchanges or redemptions of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified Preferred Stock;
(vii) [reserved]prepayments of Capital Lease Obligations in connection with the sale, closing or relocation of Stores;
(viii) prepayments of Indebtedness in connection with the incurrence of Refinancing Indebtedness permitted pursuant to Section 6.01(a)(ii) or (x);
(ix) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(iii), if permitted by the subordination provisions applicable to such Indebtedness; and
(viiix) prepayment unless an Event of Junior Financing owed Default shall have occurred and be continuing, mandatory prepayments of Indebtedness and interest under the New Notes and/or the Bridge Facility.
(c) The Borrower and the Subsidiaries will not effect Optional Debt Repurchases of Outside Indebtedness unless immediately prior and after giving effect to any such Optional Debt Repurchases, (x) no Default or Event of Default shall have occurred and be continuing and (y) the Borrower or a Restricted Subsidiary or the prepayment shall have Revolver Availability of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)more than $100,000,000.
Appears in 1 contract
Samples: Credit Agreement (Rite Aid Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Parent Borrower will not, and will not permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Wholly Owned Subsidiaries may declare and pay dividends with respect to their Equity Interests and Subsidiaries that are not Wholly Owned Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (ii) the Parent Borrower may, subject to Section 6.02, make dividends with respect to its Equity Interests consisting solely of additional Equity Interests permitted hereunder and (iii) the Parent Borrower may make Restricted Payments to management or employees of the Parent Borrower and the Subsidiaries or any other Restricted Subsidiary; provided that their Permitted Transferees (as defined in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(iiStockholders Agreement) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year during the term of Holdingsthis Agreement, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (Stockholders Agreement, employment agreements, stock option plans or to make Restricted Payments to allow Holdings agreements or any direct other benefit plans or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests)agreements; provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have has occurred and be is continuing or would result therefrom, additional ; and provided further that no Restricted Payments shall be permitted pursuant to this clause (iii) in respect of shares of the Series B Preferred Stock, other than in connection with the repurchase by the Parent Borrower of unvested shares of Series B Preferred Stock under the terms of the 2004 Restricted Stock Incentive Plan of the Parent Borrower; (iv) the Parent Borrower may repurchase or otherwise acquire from any holder thereof shares of Qualified Preferred Stock for consideration consisting solely of (x) Qualified Preferred Stock, (y) cash in an aggregate amount not greater than the amount of Net Proceeds received from a substantially concurrent issuance of Qualified Preferred Stock or (z) a combination of the Qualified Preferred Stock described in clause (x) and the cash described in clause (y); provided that no Default has occurred and is continuing or would result therefrom; and (v) the Parent Borrower may issue shares of the Series B Preferred Stock as provided in Section 6.02(iv) (insofar as such issuance constitutes the agreement to exceed $3,000,000make the Restricted Payments contemplated by the terms of the Series B Preferred Stock); provided that this clause (v) shall not permit the making of any Restricted Payment in respect of the Series B Preferred Stock.
(b) The Parent Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingSenior First Lien Note, Senior Second Lien Note or Senior Subordinated Note, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior FinancingSenior First Lien Note, Senior Second Lien Note or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingSenior Subordinated Note, except:
except (i) payment of regularly scheduled interest payments as and principal paymentswhen due in respect of the Senior First Lien Notes; provided that the Parent Borrower shall not be permitted to make cash interest payments (A) on and prior to June 15, mandatory offers to repay2007, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by Senior First Lien Notes (other than the subordination provisions Amended 2004 Notes and any initial or successive Permitted Notes Refinancing Indebtedness in respect thereof;
) unless (x) such payment is made after the date that is 18 months after the Effective Date, (y) no Default has occurred and is continuing or would result therefrom and (z) the Fixed Charge Coverage Ratio as of the last day of the most recently completed fiscal month for which financial statements have been delivered pursuant to Section 5.01(a), (b) or (c) is equal to or greater than 1.15 to 1.00 or (B) at any time, in respect of any Amended 2004 Notes (or any initial or successive Permitted Notes Refinancing Indebtedness in respect thereof), except (in the case of this clause (B)) for any cash interest payment made in lieu of any payment of interest in-kind in an amount less than the minimum denomination of the applicable notes in accordance with the terms thereof, (ii) Permitted Refinancing payment of Indebtedness to regularly scheduled interest payments as and when due in respect of the extent permitted by Section 6.01;
Senior Second Lien Notes and Senior Subordinated Notes and (iii) payment of principal or accreted value of or interest on any Senior First Lien Note, Senior Second Lien Note or Senior Subordinated Note in connection with the conversion incurrence of any Junior Financing to Equity Interests Permitted Notes Refinancing Indebtedness in respect thereof (other than Disqualified Equity Interestsincluding payment of cash in respect of the Senior First Lien Notes as expressly contemplated by clause (b) of Holdings or any the definition of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii“2004 Notes Restatement”).
Appears in 1 contract
Samples: Credit Agreement (Pliant Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary Holdings may declare and pay dividends with respect to its capital stock payable solely in additional shares of its common stock;
(ii) Subsidiaries of the Borrower may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner wholly owned Subsidiaries of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Persondeclare and pay dividends ratably with respect to their capital stock;
(iii) [reserved]if at the time thereof and after giving effect thereto no Default has occurred and is continuing, the Borrower may pay dividends or make loans to Holdings at such times and in such amounts, not exceeding $500,000 during any fiscal year, as shall be necessary to permit Holdings to discharge its permitted liabilities (other than to make any payments 100 with respect to the Holdings Senior Discount Debentures);
(iv) non-cash repurchases following the fifth anniversary of Equity Interests in Holdings (or any direct or indirect parent of Holdings)the Effective Date, if at the time thereof and after giving effect thereto no Default has occurred and is continu ing, the Borrower may pay dividends or make loans to Holdings at such times and in such amounts, not exceeding $14,420,000 during any Restricted Subsidiary deemed fiscal year, as shall be necessary to occur upon exercise of stock options or warrants if such Equity Interests represent a portion permit Holdings to pay, as and when due, interest on the Holdings Senior Discount Debentures accrued subsequent to the fifth anniversary of the exercise price payable in connection with the exercise of such options or warrantsEffective Date;
(v) so long as Holdings may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of Holdings and its Subsidiaries, including the redemption or purchase of shares of common stock of Holdings held by former employees of Holdings or any Subsidiary follow ing the termination of their employment, if (A) at the time thereof and after giving effect thereto no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests and (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect B) after giving effect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance Restricted Payment, the redemption, acquisition, retirement, repurchase or settlement aggregate cumulative amount of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) shall not to exceed the sum of (1) $1,000,000 in during any calendar fiscal year with unused amounts in or (2) $10,000,000 at any calendar year being carried over to succeeding calendar years; provided that (A) time during this Agreement, plus the aggregate amount of all such Restricted Payments made on or Net Cash Proceeds received by Holdings and its Subsidiaries after the Effective Date shall not exceed $5,000,000 and prior to making such Restricted Payment from the issuance of additional shares of its common stock to members of management or employees of Holdings and its Subsidiaries; provided that the promissory notes permitted under Section -------- 6.04(h) may be forgiven or returned without regard to the limitation in clause (B) above and the forgiveness or return thereof shall not be treated as Restricted Payments for purposes of determining compliance with such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower clause (or by Holdings and contributed to the BorrowerB) or the Restricted Subsidiaries after the Effective Dateabove;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) pay cash dividends or other distributions on make loans to Holdings in such amounts and at such times as Holdings makes Restricted Payments permitted by clause (v) above; and
(vii) if at the stock of time thereof and after giving effect thereto no Default has occurred and is continuing, the Borrower may pay dividends or make loans to Holdings paid in such amounts and declared solely for the purpose of fundingat such times as required to permit Holdings to pay, without duplicationas and when due, (i) payments by Holdings in respect of income taxes directly payable by Holdings attributable with respect to the consolidated, combined tax filing group that includes the Borrower and its ownership Subsidiaries; provided that dividends or loans pursuant to this clause (vii) shall not at any time exceed the amount of the Borrower, including any franchise or similar income taxes directly that would then be payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted SubsidiariesSubsidiaries were not a part of a consolidated, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into combined tax filing group with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000Person.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, cash securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, any Indebtedness other than payments in respect of any Junior Financing the Subordinated Debt prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]payment of interest on the Holdings Senior Discount Debentures payable solely by the issuance by Holdings of additional Holdings Senior Discount Debentures, provided that after the fifth anniversary of the -------- Effective Date, Holdings will be permitted to pay interest in cash on the Holdings Senior Discount Debentures as and when due;
(vi) [reserved];repayment of Indebtedness (including Indebtedness under the Existing Credit Agreements) on the Effective Date in connection with the Recapitalization; and
(vii) [reserved]; and
payment of intercompany Indebtedness between or among the Borrower and its Subsidiaries permitted 102 under clause (iv) of Section 6.01(a) and payment of Indebtedness permitted under clauses (viii) prepayment and (ix) of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viiiSection 6.01(a).
Appears in 1 contract
Samples: Credit Agreement (Laralev Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will notdeclare or make, and will not permit any Restricted Subsidiary to, make or payagree to pay or make, directly or indirectly, any Restricted Payment, except:except that
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower Any Loan Party or any Subsidiary of a Loan Party may declare and pay cash dividends or make other Restricted Subsidiarydistributions of property to a Loan Party; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, Parent under this clause (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used (w) to pay general corporate and overhead expenses incurred by Holdings to pay (or to make Restricted Payments to allow any direct the Parent in the ordinary course of business, or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect amount of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors any director or officers, employees, directors or managers, consultants or independent contractors officer of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted SubsidiariesParent, (3x) [reserved] to pay franchise taxes and other fees, taxes and expenses required to maintain the corporate existence of Holdings or the Parent, (4y) amounts to pay taxes that are due and payable pursuant to any investor management agreement entered into with by the Sponsor on or after Parent as the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year parent of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower a consolidated group that includes Parent and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvz) so long as no Event of Default shall have occurred and be continuing under SECTIONS 6.10, 7.01(a), 7.01(b), 7.01(h), or 7.01(i) or would result therefrom, additional to pay interest as and when due in respect of the Holdco Notes to the extent required under the Holdco Note Documents;
(ii) The Loan Parties may make Restricted Payments for the purpose of paying amounts owing under the Advisory Agreement, to the extent permitted under SECTION 6.07;
(iii) The Loan Parties may make Restricted Payments consisting of Permitted Dispositions of the type described, and subject to the limitations contained, in an amount the definition thereof;
(iv) The Loan Parties may make Restricted Payments constituting repurchases of equity interests in the Parent or any Subsidiary in connection with the exercise of stock options or warrants if such equity interests represent a portion of the exercise price of such option or warrants, provided that Restricted Payments made pursuant to this clause (v) shall not to exceed $3,000,0002,000,000 in any Fiscal Year of the Parent; and
(v) The Loan Parties may make other Restricted Payments if the Payment Conditions are satisfied (provided that, for the purposes of this clause (a)(v), the percentage set forth in the definition of “Pro Forma Availability Condition” shall be 25% and the Fixed Charge Coverage Ratio requirement set forth in the definition of “Payment Conditions” shall be 1.15:1.0).
(b) The Borrower No Loan Party will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, make any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect Capital Stock (as long as no Change in Control would result therefrom) and payments of any Junior Financing prohibited by interest in-kind of the subordination provisions thereofLoan Parties;
(ii) payments of principal and interest in respect of any Subordinated Indebtedness (subject to applicable subordination provisions relating thereto);
(iii) (A) payments of principal (including mandatory prepayments) and interest as and when due in respect of any Permitted Refinancing Indebtedness (other than Subordinated Indebtedness) and (B) as long as the Payment Conditions are satisfied, prepayments of Permitted Indebtedness (other than the Senior Notes, the Holdco Notes, the Term Loan Financing Facility, Indebtedness due to the Sponsor or any of its Affiliates (other than Indebtedness due to any of the Loan Parties or their Subsidiaries) or Subordinated Indebtedness);
(iv) prepayment in whole or in part of the Senior Notes, the Holdco Notes, or the Term Loan Financing Facility with the proceeds of any equity securities issued or capital contributions received by any Loan Party or any Subsidiary for the purpose of making such payment or prepayment;
(v) prepayment in whole or in part of the Senior Notes, the Holdco Notes, or the Term Loan Financing Facility from any refinancing of the Senior Notes, the Holdco Notes, or the Term Loan Financing Facility not prohibited hereunder;
(vi) if the Payment Conditions are satisfied, prepayment in whole or in part of the Senior Notes or the Holdco Notes;
(vii) if the Term Payment Availability Conditions are satisfied, prepayment in whole or in part of the Term Loan Financing Facility;
(viii) as long as no Specified Default then exists or would arise therefrom, payments of interest only on account of Permitted Indebtedness due to the Sponsors or Sponsor Related Parties, stockholders and/or Affiliates (subject to applicable subordination provisions relating thereto);
(ix) as long as no Specified Default then exists or would arise therefrom, prepayments of the AHYDO Catch-Up Payment in an aggregate amount not to exceed $25,000,000;
(x) payments either of (A) cash to shareholders, or (B) principal and interest in respect of notes issued to stockholders, in each case, in connection with the repurchase of shares of Capital Stock of the Parent owned by such shareholder, provided that such payments shall not exceed $5,000,000 in the aggregate in any Fiscal Year, provided that, in the event the entire $5,000,000 is not utilized in any Fiscal Year, one hundred percent (100%) of such unutilized portion may be carried forward to succeeding Fiscal Years of the Parent; and
(xi) refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to under this clause (viii)Agreement.
Appears in 1 contract
Samples: Credit Agreement (Burlington Coat Factory Investments Holdings, Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary Holdings may make Restricted Payments declare and pay dividends with respect to the Borrower its capital stock payable solely in additional shares of its common stock or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))Current Redeemable Equity;
(ii) Subsidiaries of the Borrower may declare and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Personpay dividends ratably with respect to their capital stock;
(iii) [reserved]Holdings and the Borrower may make the Restricted Payments (A) contemplated by and permitted under Section 6.04(a)(i), so long as, in each instance, immediately prior to, and after giving effect to, such Restricted Payment, no Default shall exist, and (B) Holdings may make Restricted Payments consisting of Company Notes pursuant to the Stockholders’ Agreement;
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments may pay to Holdings, which Holdings may use at such times and in such amounts as shall be necessary, after giving effect to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred the application by Holdings of any other cash resources available to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest it (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interestsincluding Permitted Investments), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of to permit Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:to
(A) cash pay taxes imposed upon it and liabilities incidental to its existence (including, without limitation, the premiums of directors’ and officers’ errors and omissions insurance and indemnities owing to officers and directors and expenses in connection with public filings) when due,
(B) pay directors’ fees to its directors and actual operating expenses when due, provided that dividends or other distributions on the stock of the Borrower paid to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings paying directors’ fees and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries actual operating expenses shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year,
(C) pay Permitted Management Fees that do not exceed in any fiscal year $1,000,000, plus indemnities and usual and customary out-of-pocket expenses provided for under the Permitted Management Agreement,
(D) pay customary and reasonable fees and expenses in connection with the Effective Date Transactions and other issuances of Holdingsequity or Indebtedness in each case permitted by this Agreement and with Permitted Acquisitions,
(E) make Restricted Payments to be made by Holdings that are permitted by clause (iii) above,
(F) make investments in the Tracker Sub described in clause (k) of the definition of Permitted Investments, and
(G) if at the time thereof and after giving effect thereto no Default has occurred and is continuing, make payments on Holdings Included Indebtedness, provided that any dividends permitted to be paid to Holdings shall not be paid more than five (5) Business Days prior to the date that Holdings will apply the proceeds of such dividends to the purposes for which such dividends are permitted,
(v) the transfer of the stock of the Tracker Sub described in Section 6.05(f);
(vi) Restricted Payments that are part of the Effective Date Transactions;
(vii) Restricted Payments made with the proceeds of contributions to the capital of the applicable Loan Party not more than five (5) Business Days prior to such Restricted Payments, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing then exists or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8exist after giving effect thereto; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;; and
(iv) [reserved];prepayment or any other repurchase, redemption or repayment of the June 2004 Notes to the extent permitted by Section 6.14, below; and
(v) [reserved];
purchase (viprior to maturity) [reserved];
(vii) [reserved]; and
(viii) or prepayment of Junior Financing owed to Indebtedness (other than Subordinated Indebtedness and Indebtedness under the Borrower June 2004 Notes) so long as immediately prior thereto, and after giving effect thereto, no Default exists or a Restricted Subsidiary would exist, unless such purchase or the prepayment of Permitted Refinancing of such Indebtedness is made with the proceeds of any other Junior Financing; providedcontribution to the capital of, thatas the case may be, no Loan Party shall make any Holdings or the Borrower not more than five (5) Business Days prior to such purchase or prepayment, in which case such purchase or prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)can be so made.
Appears in 1 contract
Samples: Credit Agreement (Argo Tech Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Borrower may declare and pay dividends or other distributions with respect to its Capital Stock payable solely in additional shares of its common stock, (ii) Restricted Subsidiary Subsidiaries may declare and pay dividends ratably with respect to their Capital Stock, (iii) the Borrower may make Restricted Payments Payments, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and the Restricted Subsidiaries, in an aggregate amount not in excess of (A) Equity Proceeds and Conversion Proceeds received after the date hereof and not applied to any other Designated Equity Proceeds Use plus (B) to the extent not made with such Equity Proceeds or Conversion Proceeds, $5,000,000 during any 12-month period and (iv) the Borrower may purchase or otherwise retire any other Restricted Subsidiary; provided that Capital Stock of the Borrower to the extent necessary (as determined in the case of any such Restricted Payment good faith by a Restricted Subsidiary that is not a Wholly Owned Subsidiary majority of the disinterested members of the Board of Directors of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party whose determination shall be deemed conclusive) to utilize on a dollar for dollar basis prevent the basket for Investments loss, or to secure the reinstatement, of any material license or franchise held by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefromfrom any Governmental Authority, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate Borrower shall notify the Administrative Agent of any purchases or retirements pursuant to clause (iv) preceding in an amount of all such Restricted Payments made on or after the Effective Date shall not exceed greater than $5,000,000 and (B) such amount purchases or retirements shall not result in any calendar year may be increased by an amount not to exceed a Material Adverse Effect; provided that the cash proceeds issuance of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the preferred stock of the Borrower pursuant to Holdings paid the Confirmed Plan of Reorganization and declared solely for as contemplated in the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership Disclosure Statement and the accretion of the Borrower, including any franchise liquidation preference thereunder shall not be deemed to be the incurrence of an obligation to make a Restricted Payment or similar taxes directly payable the making of a Restricted Payment by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) purposes of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,0006.09.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, (i) any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior FinancingIndebtedness or New Preferred Stock (it being understood that this Section 6.09(b) shall not be deemed to prohibit the discharge of Indebtedness pursuant to the Confirmed Plan of Reorganization or the existence of provisions as may be contained in future indentures governing unsecured indebtedness issued by the Borrower after the Effective Date substantially similar to the provisions contained in Section 4.08 of the Indentures permitting certain holders of Indebtedness of the Borrower to require the repurchase of such Indebtedness following certain sales of assets of the Borrower; provided that no such repurchases under any future indenture shall be effected so long as any Loans, Letters of Credit or Commitments are outstanding under this Agreement) or (ii) any payment to any Derivatives Counterparty as a result of any change in the market value of any such Indebtedness that is publicly traded (provided, that (A) no payment shall be deemed to have been made to any Derivatives Counterparty to the extent Derivatives Counterparties have made cumulative payments to the Borrower or any other payment (including any payment under any Swap Agreement) that has Restricted Subsidiary as a substantially similar effect to any result of changes in the market value of such publicly traded Indebtedness in a cumulative amount in excess of the foregoingpayments made to Derivatives Counterparties by the Borrower and the Restricted Subsidiaries as a result of such changes and (B) it is understood that the intent of the above language relating to payments to and from Derivatives Counterparties is to prohibit payments and distributions pursuant to transactions entered into with Derivatives Counterparties only if the Borrower intends such transactions to have substantially the same economic effect as the payments and distributions referred to in clause (i) above), except:
(i) payment of Indebtedness created under the Loan Documents and under the Existing Credit Agreement and the Loan Documents (as defined in the Existing Credit Agreement);
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness and payment of regular dividends on New Preferred Stock;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]payments to prepay, purchase or redeem the outstanding indebtedness of Greene County Partners, Inc. listed on Schedule 6.02; and
(viiix) prepayment of Junior Financing owed payments to redeem outstanding Indebtedness pursuant to the Borrower or a Restricted Subsidiary or exercise of certain rights of the prepayment of Permitted Refinancing holders of such Indebtedness with to require the proceeds repurchase of any other Junior Financing; provided, that, no Loan Party shall make any prepayment such Indebtedness arising in the event of Junior Financing owed a change in control of the Borrower specified in provisions as may be contained in future indentures governing unsecured indebtedness issued by the Borrower after the date hereof substantially similar to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Section 4.07 of each of the Indentures.
Appears in 1 contract
Samples: Credit Agreement (McLeodusa Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares of its common stock or Qualified Preferred Stock, or make cash payments in lieu of fractional shares, (ii) Subsidiaries (other than those directly owned, in whole or part, by the Borrower) may declare and pay dividends ratably with respect to their common stock, (iii) the Borrower may declare and pay cash dividends with respect to its common stock and effect repurchases, redemptions or other Restricted Subsidiary Payments with respect to its common stock, together in an aggregate amount in any fiscal year of the Borrower not to exceed 50% of Consolidated Net Income (if positive) for the immediately preceding fiscal year of the Borrower; provided that immediately prior and after giving effect to any such payment no Default or Event of Default shall have occurred and be continuing and, immediately after giving effect to any such payment, the Borrower shall have Revolver Availability of more than $100,000,000, (iv) the Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any fiscal year of the Borrower with respect to any Qualified Preferred Stock; provided that (x) immediately prior and after giving effect to any such payment, no Default or Event of Default shall have occurred and be continuing and (y) only so long as a Financial Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended on or prior to the date of such payment, calculated on a pro forma basis as if such payment were made on the last day of such period (and excluding any such payments previously made pursuant to this clause during such four quarter period but attributed for purposes of this calculation to the last day of a prior period which day does not occur in such four quarter period) is not less than the ratio applicable to such period of four fiscal quarters under Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments consisting of the repurchase or other acquisition of shares of, or options to purchase shares of, capital stock of the Borrower or any of its Subsidiaries from employees, former employees, directors or former directors of the Borrower or any Subsidiary (or their permitted transferees), in each case pursuant to stock option plans, stock plans, employment agreements or other Restricted Subsidiaryemployee benefit plans approved by the board of directors of the Borrower; provided that in no Default has occurred and is continuing; and provided further that the case aggregate amount of such Restricted Payments made after the Original Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay cash dividends to the Borrower; provided that the Borrower shall, within a reasonable time following receipt of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary payment, use all of the Borrower, such Restricted Payment is made proceeds thereof for a purpose set forth in Section 5.10(b) or a Refinancing Amendment (including the payment of dividends required or permitted pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under this Section 6.04(c6.08(a));
, (iivii) the Borrower and each Restricted Subsidiary the Subsidiaries may make dividend payments or other distributions payable solely in declare and pay cash dividends with respect to the Equity Interests (other than Disqualified Equity Interestsset forth on Schedule 6.08(a) to the extent, and only to the extent, required pursuant to the terms of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of or any other agreement in effect on the exercise price payable in connection with the exercise of such options or warrants;
Effective Date and (vviii) so long as no Default or Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Borrower may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire redeem or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members shares of the Board of Directors or employees Borrower’s and/or its Subsidiaries’ (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributeesincluding Rite Aid Lease Management Company’s) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that Preferred Stock (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies solely with Net Cash Proceeds received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries from issuances of its common stock after the Original Restatement Effective Date;
, provided that any such repurchase or redemption is effected within 150 days after the receipt of such proceeds or (viB) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or with other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable funds available to the Borrower and its Subsidiaries for any taxable yearif, (1) calculated by multiplying such income by the maximum combined tax rate applicable immediately after giving effect to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct redemption or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdingsrepurchase, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds Revolver Availability of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other more than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000100,000,000.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior FinancingIndebtedness (which, or for purposes of this Section 6.08(b), shall include any other payment (Indebtedness, including any payment under any Swap Agreement) that has a substantially similar effect the Borrower’s 8.5% Convertible Notes due May 2015, incurred pursuant to any of the foregoingclauses (i) through (xx) of Section 6.01(a)), except:
(i) payment payments or prepayments or exchanges of Indebtedness (including Refinancing Indebtedness) created under the Senior Loan Documents (including any Refinancing Amendment executed in accordance with Section 6.01(c)) and prepayments, repurchases or redemptions of Additional Senior Debt made in accordance with Section 2.11(c);
(ii) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness permitted pursuant to Section 6.01(a);
(iiiii) Permitted Refinancing prepayments of Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of Section 6.01(a) with the proceeds of, or in exchange for, Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of Section 6.01(a), respectively;
(iv) payments of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) provided no Default has occurred and is continuing or would result therefrom, Optional Debt Repurchases of Inside Indebtedness and, to the extent permitted by Section 6.01;
paragraph (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interestsc) of Holdings or any this Section, Optional Debt Repurchases of its direct or indirect parent;
(iv) [reserved];
(v) [reserved]Outside Indebtedness;
(vi) [reserved]repurchases, exchanges or redemptions of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified Preferred Stock or cash payments in lieu of fractional shares;
(vii) [reserved]prepayments of Capital Lease Obligations in connection with the sale, closing or relocation of Stores;
(viii) prepayments and exchanges of Indebtedness in connection with the incurrence of Refinancing Indebtedness permitted pursuant to Section 6.01(a)(ii) or (x);
(ix) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(iii), if permitted by the subordination provisions applicable to such Indebtedness; and
(viiix) prepayment unless an Event of Junior Financing owed Default shall have occurred and be continuing, mandatory prepayments of Indebtedness and interest under the New Notes.
(c) The Borrower and the Subsidiaries will not effect Optional Debt Repurchases of Outside Indebtedness unless immediately prior and after giving effect to any such Optional Debt Repurchases, (x) no Default or Event of Default shall have occurred and be continuing and (y) the Borrower or a Restricted Subsidiary or the prepayment shall have Revolver Availability of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)more than $100,000,000.
Appears in 1 contract
Samples: Credit Agreement (Rite Aid Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary the Borrower may declare and pay dividends with respect to any class of its capital stock payable solely in additional shares of such class of stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock, (iii) the Borrower may make Restricted Payments to on the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable Effective Date in connection with the exercise of such options or warrants;
Recapitalization in accordance with and as contemplated by the Merger Agreement, (viv) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Borrower may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights options purchased by or similar securities issued with respect granted to members of senior management (other than the Grays) and other key employees pursuant to a Borrower stock purchase and option plan in the event any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemptionemployee is terminated for any reason, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, but in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with no event shall the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(lall such repurchases exceed $500,000 in any fiscal year; provided that the amount of Restricted Payments permitted under this clause (iv) in lieu any fiscal year shall be increased on a cumulative basis by an amount equal to the total unused amount of Restricted Payments permitted by this clause (iv) for the preceding year; (v) not the Borrower shall accrue the ability to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that repurchase Xxxx Common Stock and Xxxx Preferred Stock and may repurchase Xxxx Common Stock and Xxxx Preferred Stock as follows: (A) the aggregate amount of all such Restricted Payments made on or after Borrower shall accrue the Effective Date shall not exceed $5,000,000 ability to repurchase Xxxx Common Stock and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date Xxxx Preferred Stock in an aggregate amount not to exceed $1,000,000 2,500,000 during any Test Period; provided that any amount of Xxxx Common Stock and Xxxx Preferred Stock which the Borrower accrues the ability to but does not repurchase in any fiscal year Test Period may be carried forward to subsequent Test Periods; provided further, that notwithstanding such accrual, the Borrower (1) shall only repurchase Xxxx Common Stock to the extent required by the provisions of Holdingsthe Stockholders’ Agreement, as in effect as of the Effective Date, and (2) shall only repurchase Xxxx Common Stock and/or Xxxx Preferred Stock so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing on the date of any such repurchase or would result therefromfrom such repurchase; and (B) on the last day of any Test Period, additional Restricted Payments the Borrower may repurchase Xxxx Common Stock and Xxxx Preferred Stock in an additional aggregate amount of up to $2,500,000; provided that (1) no Default shall have occurred and be continuing on such day or would result from such repurchase and (2) on the date of and after giving effect to such repurchase (and the incurrence of any Indebtedness to be incurred on such date), the Leverage Ratio shall be less than 3.5 to 1.0, (for purposes of determining the Leverage Ratio for this clause, Consolidated EBITDA shall be calculated for the period of four consecutive fiscal quarters of the Borrower ended on the last day of the most recent fiscal quarter for which financial statements have been delivered to the Administrative Agent under Section 5.01(a) or (b)); provided further, that the Borrower shall only repurchase Xxxx Common Stock to the extent required by the provisions of the Stockholders’ Agreement, as in effect as of the Effective Date; (vi) on the last day of any Test Period, the Borrower may pay accrued dividends with respect to the Xxxx Preferred Stock in cash in an aggregate amount not to exceed $3,000,000250,000; provided that (1) no Default shall have occurred and be continuing on such day or would result from such payment and (2) on the date of and after giving effect to such payment (along with (A) any payment pursuant to clause (v)(B) above on such date and (B) the incurrence of any Indebtedness to be incurred on such date), the Leverage Ratio (determined as set forth in clause (v)(B)(2) above) shall be less than 3.5 to 1.0; (vii) the Borrower may pay cash dividends with respect to any Permitted Acquisition Preferred Stock; (viii) the Borrower may redeem or repurchase Permitted Acquisition Preferred Stock in accordance with the terms thereof; (ix) on the last day of any Test Period following the fifth anniversary of the Effective Date, the Borrower may pay dividends with respect to the PIK Preferred Stock in cash; provided that (1) no Default shall have occurred and be continuing on such day or would result from such payment and (2) on the date of and after giving effect to such payment (and the incurrence of any Indebtedness to be incurred on such date), the Borrower and its Subsidiaries shall be in compliance with the covenant contained in Section 6.13 (with the Leverage Ratio determined as set forth in clause (v)(B)(2) above); (x) the Borrower may redeem the PIK Preferred Stock in full with the proceeds of the issuance of Permitted Subordinated Indebtedness in compliance with Section 6.01(a)(x); provided that no Default shall have occurred and be continuing on such day or would result from such redemption; and (xi) the Borrower may, and may permit any Subsidiary to, make payments to the Vestar Group pursuant to and to the extent expressly contemplated by the Vestar Management Agreement.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, cash securities or other property) of or in respect of principal of or interest on any Junior Financingthe Subordinated Debt or the 15¼% Senior Subordinated Notes, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingSubordinated Debt or the 15¼% Senior Subordinated Notes, except:
except (i) payment of regularly scheduled interest payments as and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingwhen due, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
, (ii) Permitted Refinancing payments in respect of Indebtedness the redemption, repurchase and retirement of 15¼% Senior Subordinated Notes, including any premium (if any) and accrued and unpaid interest thereon to the date of such redemption or repurchase, at any time with and to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior FinancingAdditional Tranche B Term Loans, and (iii) payments in respect of the redemption, repurchase and retirement of 15¼% Senior Subordinated Notes, including any premium (if any) and accrued and unpaid interest thereon to the date of such redemption or repurchase, in an amount not exceeding $15,000,000 in the aggregate; provided, that, no Loan Party shall make provided that (A) at the time of any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party such payment pursuant to this clause (viiiiii), no Revolving Loans shall be outstanding and (B) all 15¼% Senior Subordinated Notes redeemed or repurchased pursuant to the preceding clauses (ii) and (iii) shall immediately be canceled.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and will not permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Subsidiaries of the Borrower may declare and pay dividends or distributions ratably with respect to their Equity Interests, (ii) provided no Default or Event of Default is continuing or would result therefrom, the Borrower may make Restricted Subsidiary Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries; provided that the amount thereof, taken together with any payments or transfers of cash, assets or debt securities pursuant to clause (d) of Section 6.09, do not exceed $5,000,000 in any fiscal year, (iii) provided no Default or Event of Default is continuing or would result therefrom, the Borrower may make Restricted Payments to the Borrower or any Ultimate Parent in an aggregate amount per fiscal year not to exceed the Borrower’s Portion of Excess Cash Flow for the immediately preceding fiscal year less the amount of other Restricted SubsidiaryDesignated Excess Cash Expenditures made with such Borrower’s Portion of Excess Cash Flow for such immediately preceding fiscal year; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests proceeds of such Restricted Subsidiary based Payments are used (x) to effect Specified Investments, (y) to pay interest on their relative ownership interests Restructuring Notes or Additional Notes or (z) at any time on or after the second anniversary of the relevant class Closing Date and so long as the Ultimate Parent Leverage Ratio is less than or equal to 3.00 to 1.00, to effect repurchases of Equity Interests Restructuring Notes or Additional Notes (it being understood and agreed provided, however, that any such dividends or distributions relating to any such cash distributed interest payment must be paid not earlier than ten Business Days prior to a Subsidiary that the date when such cash interest is an owner of Equity Interests but is not a Loan Party shall required to be deemed paid by the Ultimate Parent and the proceeds must (except to utilize on a dollar for dollar basis the basket for Investments extent prohibited by Loan Parties in non-Loan Parties under Section 6.04(c));
(iiapplicable subordination provisions) be applied by the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in Ultimate Parent to the Equity Interests (other than Disqualified Equity Interests) payment of such Person;
(iii) [reserved];
interest when due), (iv) non-cash repurchases Restricted Payments in amounts as shall be necessary to make Tax Payments; provided that all Restricted Payments made pursuant to this clause (iv) are used by the Ultimate Parent for the purpose specified in this clause (iv) within 30 days of Equity Interests in Holdings (or any direct or indirect parent of Holdings)receipt thereof, the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as provided no Default or Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments the Borrower may from time to Holdings, which Holdings may use time pay cash dividends or distributions to redeem, acquire, retire, repurchase or settle its Equity Interests the Ultimate Parent in an amount not in excess of the regularly scheduled cash interest payable on the Restructuring Notes (or any optionsAdditional Notes incurred to refinance such Restructuring Notes) during the next period of ten Business Days, warrantsprovided, restricted stock however, that (A) any such dividends or stock appreciation rights or similar securities issued with respect distributions relating to any such Equity Interestscash interest payment must be paid not earlier than ten Business Days prior to the date when such cash interest is required to be paid by the Ultimate Parent and the proceeds must (except to the extent prohibited by applicable subordination provisions) or be applied by the Ultimate Parent, to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement payment of such Equity Interest interest when due, (or make Restricted Payments B) to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance extent the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment amount of any such Person dividend or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount distribution together with the aggregate amount of loans and advances to Holdings other dividends or distributions made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar during the then current fiscal year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that exceeds the Ultimate Parent Annual Cash Interest Amount for such fiscal year, such excess amount shall (Ax) reduce the aggregate amount of all such Restricted Payments made permitted pursuant to clause (iii) above the amount of Optional Repurchases of other Indebtedness permitted under Section 6.08(b)(vi) and the amount of Investments permitted under Sections 6.04(f) and (l), in each case, during the following fiscal year of the Borrower based on or after the Effective Date shall Borrower’s Portion of Excess Cash Flow with respect to the Excess Cash Flow in respect of the then current fiscal year and (y) only be permitted to be paid to the extent Restricted Payments are not otherwise permitted to be paid under this Section for such purpose at such time and to the extent such amount does not exceed $5,000,000 and (B) such the amount of the anticipated Borrower’s Portion of Excess Cash Flow with respect to the Excess Cash Flow in any calendar respect of the then current fiscal year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings to be calculated and contributed evidenced in a manner reasonably satisfactory to the BorrowerAdministrative Agent) and (C) the Borrower and its Subsidiaries shall be in Pro Forma Compliance after giving effect to the payment of any such dividends or the Restricted Subsidiaries after the Effective Date;
distributions pursuant to this clause (v), (vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments to the Ultimate Parent, and the Ultimate Parent may, in cash to Holdings:
(A) cash dividends or other distributions on the stock turn, make such Restricted Payments as part of the Borrower to Holdings paid Shared Services Transactions and declared solely for the purpose (vii) provided no Default or Event of fundingDefault is continuing or would result therefrom, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to may make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date Ultimate Parent in an aggregate amount not to exceed $1,000,000 in 5,000,000 during any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing subordinated Indebtedness to the extent prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]prepayment of Capital Lease Obligations in an aggregate cumulative amount from and after the Closing Date not exceeding $5,000,000;
(vi) [reserved]provided no Default or Event of Default is continuing or would result therefrom, Optional Repurchases of other Indebtedness involving cumulative expenditures in any fiscal year not in excess of an amount equal to the Borrower’s Portion of Excess Cash Flow for the immediately preceding fiscal year less the amount of other Designated Excess Cash Expenditures made with such Borrower’s Portion of Excess Cash Flow for such immediately preceding fiscal year;
(vii) [reserved]payment of any Indebtedness owing to the Service Company arising pursuant to the Shared Services Transactions; and
(viii) prepayment payment of Junior Financing owed any Indebtedness owing to the Borrower or a any Subsidiary Loan Party.
(c) the Borrower will not, and will not permit any Subsidiary to, furnish any funds to, make any Investment in, or provide other consideration to any other Person for purposes of enabling such Person to, or otherwise permit any such Person to, make any Restricted Subsidiary Payment or other payment or distribution restricted by this Section that could not be made directly by the Borrower in accordance with the provisions of this Section.
(d) Notwithstanding anything to the contrary in this Agreement or the prepayment of Permitted Refinancing of such Indebtedness with other Loan Documents, the proceeds of any other Junior Financing; provided, that, no Loan Party Parties shall be permitted to make any prepayment of Junior Financing owed all distributions required to any Restricted Subsidiary that is not a be made by the Loan Party Parties on or after the Closing Date (as defined in the Reorganization Plan) pursuant to this clause (viii)the Reorganization Plan and the Confirmation Order, in each case as in effect on the Closing Date.
Appears in 1 contract
Samples: Credit Agreement (DEX ONE Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Each Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each FCX may declare and pay dividends with respect to its capital stock payable solely in additional shares of its common stock, (ii) Restricted Subsidiary Subsidiaries may declare and pay dividends ratably with respect to their capital stock, (iii) FCX may make Restricted Payments Payments, not exceeding $5,000,000 during any fiscal year, pursuant to the Borrower and in accordance with stock option plans or any other Restricted Subsidiary; provided that benefit plans for management or employees of FCX and its Subsidiaries, (iv) so long as no Default shall have occurred and be continuing, PTFI may pay dividends to FCX at such times and in such amounts as shall be necessary to permit FCX to discharge its operating expenses incurred in the case ordinary course of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary business and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests its permitted liabilities (other than Disqualified Equity Interestsany liability in respect of a Restricted Payment not permitted to be made by FCX hereunder) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
and (v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefromcontinuing, additional FCX may pay regularly scheduled quarterly dividends in respect of its preferred stock and effect regularly scheduled mandatory redemptions of its preferred stock, in each case, to the extent and in the amounts required by the prospectus under which such preferred stock was issued; provided, however, that no Restricted Payments may be made in an amount respect of preferred stock after July 31, 2003, if a Qualifying Gold Preferred Restructuring has not to exceed $3,000,000been consummated by such date.
(b) The Each Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities (other than common stock of FCX) or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities (other than common stock of FCX) or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent6.01(a);
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]the purchase of 2026 Senior Notes as a result of a put of such 2026 Senior Notes by the holders thereof in November 2003;
(vi) [reserved]prepayments of Indebtedness made with Discretionary Funds;
(vii) [reserved]the purchase by FCX of the PTMI Loan Rights pursuant to the Put Agreement and this Agreement; and
(viii) prepayment prepayments of Junior Financing Indebtedness owed to either Borrower by the other Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any a Restricted Subsidiary by another Restricted Subsidiary, provided that prepayments of Indebtedness owed to a Restricted Subsidiary that is not a Loan Party pursuant shall be permitted only to this clause the extent no Default has occurred and is continuing at the time of such prepayment.
(viii)c) Each Borrower will not, and will not permit any Restricted Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement.
Appears in 1 contract
Samples: Credit Agreement (Freeport McMoran Copper & Gold Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Neither Holdings nor the Borrowers will, nor will not, and will not they permit any other Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
except (i) each Restricted Subsidiary Holdings may make Restricted Payments declare and pay dividends with respect to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions its Capital Stock payable solely in the Equity Interests (other than Disqualified Equity Interests) additional shares of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdingscommon stock, (ii) so long as Holdings Restricted Subsidiaries may declare and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required pay dividends ratably to be paid by the direct or indirect parent holders of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable yeartheir Capital Stock (other than Holdings), (1iii) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to may make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved]Payments, (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed exceeding $1,000,000 5,000,000 in any fiscal year of Holdings, so long as no Event Holdings pursuant to and in accordance with stock option plans or other benefit plans for management or employees of Default specified in Section 7.01(a)Holdings and the Restricted Subsidiaries, (b), (hiv) or (i) shall have occurred Restricted Subsidiaries may pay dividends to Holdings at such times and be continuing or would result from in such payment;
(C) the proceeds of which amounts consistent with past practice as shall be used by necessary to permit Holdings to pay ordinary course administrative, overhead taxes and related administrative expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous payments shall not exceed amounts paid in the ordinary course of business prior to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) date hereof and (bv) honor any conversion request by a holder Restricted Subsidiaries may pay dividends to Holdings in an aggregate amount sufficient to fund the payment of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary interest in respect of withholding the Indebtedness under the Holdings Indentures, which interest is due or similar Taxes payable upon exercise becomes due within 30 days from the date of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or each such dividend, provided, however, that no Default exists at the Borrower’s common stock time such dividends are paid (or the payment of Restricted Payments to provided further, however, that such dividends shall not be prohibited hereby for more than 180 days in any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of consecutive 360-day period unless either an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred consisting of a payment default exists hereunder or the maturity of the Loans has been accelerated), and be continuing (vi) provided that no Default exists or would result therefrom, additional Restricted Payments Subsidiaries may pay dividends to Holdings at such times and in an amount not such amounts as are necessary for Holdings to exceed $3,000,000make timely payment when due in respect of Indebtedness of Holdings permitted by Section 6.01 other than Indebtedness under the Holdings Indentures; provided that payments in respect of the Holdings Indentures shall be governed solely by clause (v) immediately preceding.
(b) The Borrower Neither Holdings nor the Borrowers will, nor will not, and will not they permit any other Restricted Subsidiary to, to make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, Indebtedness or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingsuch Indebtedness, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the subordinated debt prohibited by the subordination provisions thereof;; and
(ii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;.
(c) Neither Holdings nor the Borrowers will, nor will they permit any other Restricted Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless (i) in the case of any Synthetic Purchase Agreement related to any Equity Interest, the payments required to be made by the Borrower or any Restricted Subsidiaries are limited to amounts permitted to be paid under this Section 6.08, (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by the Borrower or any Restricted Subsidiaries thereunder are limited to the amount permitted under this Section 6.08 and (iii) in the conversion case of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) Synthetic Purchase Agreement, the obligations of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed the Borrower and the Subsidiaries thereunder are subordinated to the Borrower or a Restricted Subsidiary or Secured Obligations on terms satisfactory to the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Administrative Agent.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary Subsidiaries may make Restricted Payments declare and pay dividends ratably with respect to their capital stock (A) to shareholders other than FCX, (B) to FCX to the Borrower or any other Restricted Subsidiary; provided that extent the proceeds of such dividends are applied to pay operating expenses in the case ordinary course of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerbusiness, such Restricted Payment is made and (C) to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) FCX so long as (1) no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this under clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (ha) or (ib) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or would (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such payment;
(C) the proceeds of which dividends shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with paid during the closing pendency of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any Event of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;Default,
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvii) so long as no Event of Default shall have occurred and be continuing (or would shall result therefromfrom the payment thereof), additional Restricted Payments FCX may pay regularly scheduled quarterly dividends in respect of its preferred stock issued and outstanding on the Effective Date and effect regularly scheduled mandatory redemptions of its preferred stock issued and outstanding on the Effective Date, in each case, to the extent and in the amounts required by the terms of such preferred stock as in effect on the Effective Date,
(iii) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), FCX may, consistent with its dividend practices as of the Effective Date, and subject to the Incurrence Test, declare and pay dividends on its shares of common stock (and on shares of common stock issued upon the conversion of or in exchange for shares of FCX’s 5 1/2% Convertible Perpetual Preferred Stock outstanding on the Effective Date) in an amount in respect of any fiscal quarter not to exceed $3,000,0000.3125 per share of FCX’s common stock (adjusted as applicable to eliminate the effect of stock dividends, stock splits, reverse stock splits and other transactions in respect of such shares of common stock, and payable in respect of any shares of common stock received pursuant to any such stock dividend, stock split, reverse stock split or other transaction) (it being understood that Restricted Payments made in reliance on this clause (iii) in respect of shares of FCX’s common stock issued or sold after the Effective Date (or in respect of shares received in stock dividends, stock splits, reverse stock splits or other transactions in respect of such shares of common stock) involving either (x) a receipt of cash proceeds that increased the Restricted Uses Basket or (y) the receipt of assets in consideration for such common stock shall constitute Restricted Uses and shall reduce the Restricted Uses Basket (which reduction may be to less than zero)), and
(iv) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), and subject to the Incurrence Test, FCX may make Restricted Payments in cash in any amounts to the extent that, immediately after giving effect thereto (and to any expenditure of cash required thereby), the Restricted Uses would not be greater than the Restricted Uses Basket.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents and payment of Ratable Obligations and Existing PD Obligations;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
6.01(a) (iii) including, without limitation, the conversion refinancing of any Junior Financing to Equity Interests (Indebtedness, other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe Senior Notes, with Indebtedness permitted under Section 6.01(a)(xi));
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment prepayments of Junior Financing Indebtedness owed to the Borrower or FCX by a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any a Restricted Subsidiary by FCX or another Restricted Subsidiary, provided that prepayments of Indebtedness owed to a Restricted Subsidiary that is not a Loan Party pursuant shall be permitted only to this the extent no Event of Default has occurred and is continuing at the time of such prepayment, except that such prepayments shall be permitted (A) to the extent the proceeds of such prepayments are applied to pay operating expenses or to make Capital Expenditures in the ordinary course of business, and (B) to the extent the proceeds of such prepayments are applied to pay scheduled debt service of such Restricted Subsidiary so long as (1) no Event of Default under clause (a) or (b) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such prepayments shall not be permitted to be paid during the pendency of such Event of Default;
(vi) prepayments of any Project Financing to the extent made by the applicable Project Financing Subsidiary with cash from the operations of such Project Financing Subsidiary;
(vii) payments of Indebtedness (other than Indebtedness referred to in clause (viii) below) that are not permitted by clauses (i)-(vi) of this Section 6.08(b) if and to the extent that after giving effect to any such payments, the Restricted Uses would not be greater than the Restricted Uses Basket; and
(viii) payment of Indebtedness created under the Restated Credit Agreement and the “Loan Documents” thereunder, provided that no Indebtedness may be prepaid under the Restated Credit Agreement (A) at any time that any Loan or LC Disbursement is outstanding and (B) if there is outstanding any Letter of Credit or Letters Credit in an aggregate outstanding amount smaller than such prepayment, unless such Letter of Credit or Letters of Credit are redesignated as Letters of Credit under the Restated Credit Agreement in accordance with Section 2.05(a)(iii).
(c) Neither paragraph (a) nor paragraph (b) above shall prohibit any Restricted Payment or payment of Indebtedness if after giving effect to such Restricted Payment or payment of Indebtedness (i) no Term Loan is outstanding and (ii) the sum of (A) the aggregate unused Revolving Commitments, (B) the aggregate unused Commitments (as defined in the Restated Credit Agreement) and (C) Available Domestic Cash shall be not less than $750,000,000.
(d) Each of paragraph (a) and paragraph (b) above shall cease to be of effect from and after the first date upon which the corporate credit ratings of FCX by each of Moody’s and S&P are, respectively, Baa3 or better and BBB- or better.
Appears in 1 contract
Samples: Credit Agreement (Freeport McMoran Copper & Gold Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will notNone of the Parent, and will not permit the Obligor or any other Restricted Subsidiary toshall make payments which are Restricted Payments, make or pay, directly or indirectly, any Restricted Payment, exceptother than:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or made by any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made Obligor in respect of its Equity Interests ratably to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests holders of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))Interests;
(ii) dividends paid by the Borrower and each Restricted Subsidiary may make dividend payments or other distributions Parent with respect to its Equity Interests payable solely in the additional Equity Interests (other than Disqualified Equity Interests) of such PersonPreferred Stock);
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any other Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar yearsPayments; provided that (A) the aggregate amount of all such Restricted Payments made on no Specified Default or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefromtherefrom and (B) at the time each such Restricted Payment is made, additional the aggregate amount of such Restricted Payment shall not exceed the Available Amount at such time (in each case, as certified by a Responsible Officer of the Obligor); and
(iv) other Restricted Payments; provided that (A) no Specified Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) at the time of and immediately after giving effect to any such Restricted Payment, the Total Adjusted Net Leverage Ratio shall not exceed the Specified Total Adjusted Net Leverage Ratio on a pro forma basis (in each case, as certified by a Responsible Officer of the Obligor);
(v) Restricted Payments at such times and in such amounts as shall be necessary to permit any Parent Entity or the Parent to pay any franchise and other similar Taxes required to maintain its corporate, legal and organizational existence associated with the Parent, the Obligor and its Subsidiaries; and
(vi) for any taxable period ending after the Refinancing Effective Date (a) for which the Obligor is treated as a partnership or disregarded entity for U.S. federal income tax purposes, the payment of distributions to the Obligor’s direct or indirect equity owners in an aggregate amount equal to the product of (x)(1) the amount of taxable income allocated from or with respect to the Obligor and its Subsidiaries to the direct or indirect equity owners of the Obligor for such taxable year, reduced by (2) any cumulative taxable losses allocated from (or arising with respect to) the Obligor and its Subsidiaries to such equity owners for any prior taxable year ending after the Amendment Effective Date to the extent such prior losses are of a character that would permit such losses to be deducted against income or gain of the taxable year and that have not previously been taken into account in reducing the amount of any Permitted Tax Distributions, and taking into account any limitations on the deductibility of such prior losses under Section 172(a) of the Code and (y) the highest maximum combined marginal U.S. federal, state and local income tax rate applicable to an individual or corporation that is resident in New York City (whichever is higher) for such taxable year (taking into account the character of the taxable income in question (long-term capital gain, qualified dividend income, etc. and the deductibility of state and local income taxes for U.S. federal income tax purposes (and any applicable limitation thereon))); or (b) for which the Obligor is treated as a member of a consolidated group for U.S. federal income tax purposes, the payment of amounts with respect to any taxable period to the extent such payments do not exceed $3,000,000the amount that the Obligor and any consolidated Subsidiaries of the Obligor would have been required to pay in respect to such relevant federal, state, local or foreign Taxes for such taxable period (computed at the highest marginal tax rate) if, for all taxable years ending after the Amendment Effective Date, the Obligor and any consolidated Subsidiaries of the Obligor had paid such Taxes as a separate consolidated, combined or unitary group separately from any Parent Entity (or, if there are not such Subsidiaries, on a separate company basis)(any such Restricted Payment permitted under this clause (vi), a “Permitted Tax Distribution”).
(b) The Borrower will notNone of the Parent, and will not permit the Obligor or any other Restricted Subsidiary to, will make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation defeasance, cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing Indebtedness other than (A) such payments in respect of Subordinated Affiliate Indebtedness and (B) such payments in respect of Subordinated Indebtedness that are prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing refinancings of Junior Indebtedness to with the extent proceeds of other Indebtedness permitted by under Section 6.016.02;
(iii) payments of secured Junior Indebtedness that becomes due as a result of the conversion voluntary sale or transfer of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe assets securing such Indebtedness in transactions permitted hereunder;
(iv) [reserved];payments of or in respect of Junior Indebtedness made solely with Equity Interests in the Parent (other than Preferred Stock); and
(v) [reserved];other payments of or in respect of Junior Indebtedness; provided that (A) no Specified Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) at the time each such payment is made, the aggregate amount of such payment shall not exceed the Available Amount at such time (in each case, as certified by a Responsible Officer of the Obligor); and
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment other payments of or in respect of Junior Financing owed to Indebtedness; provided that (A) no Specified Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) at the Borrower or a Restricted Subsidiary or the prepayment time of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed and immediately after giving effect to any Restricted Subsidiary that is such payment, the Total Adjusted Net Leverage Ratio shall not exceed the Specified Total Adjusted Net Leverage Ratio on a Loan Party pursuant to this clause pro forma basis (viiiin each case, as certified by a Responsible Officer of the Obligor).
Appears in 1 contract
Samples: Continuing Covenant Agreement
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares of its common stock or Qualified Preferred Stock, (ii) Subsidiaries (other than those directly owned, in whole or part, by the Borrower) may declare and pay dividends ratably with respect to their common stock, (iii) the Borrower may declare and pay cash dividends with respect to its common stock and effect repurchases, redemptions or other Restricted Subsidiary Payments with respect to its common stock, together in an aggregate amount in any fiscal year of the Borrower not to exceed 50% of Consolidated Net Income (if positive) for the immediately preceding fiscal year of the Borrower; provided that immediately prior and after giving effect to any such payment no Default or Event of Default shall have occurred and be continuing and, immediately after giving effect to any such payment, the Borrower shall have Revolver Availability of more than $100,000,000, (iv) the Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any fiscal year of the Borrower with respect to the Series E Preferred Stock, Series I Preferred Stock or any other Qualified Preferred Stock; provided that (x) immediately prior and after giving effect to any such payment, no Default or Event of Default shall have occurred and be continuing and (y) only so long as a Financial Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended on or prior to the date of such payment, calculated on a pro forma basis as if such payment were made on the last day of such period (and excluding any such payments previously made pursuant to this clause during such four quarter period but attributed for purposes of this calculation to the last day of a prior period which day does not occur in such four quarter period) is not less than the ratio applicable to such period of four fiscal quarters under Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments consisting of the repurchase or other acquisition of shares of, or options to purchase shares of, capital stock of the Borrower or any of its Subsidiaries from employees, former employees, directors or former directors of the Borrower or any Subsidiary (or their permitted transferees), in each case pursuant to stock option plans, stock plans, employment agreements or other Restricted Subsidiaryemployee benefit plans approved by the board of directors of the Borrower; provided that in no Default has occurred and is continuing; and provided further that the case aggregate amount of such Restricted Payments made after the Original Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay cash dividends to the Borrower; provided that the Borrower shall, within a reasonable time following receipt of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary payment, use all of the Borrower, such Restricted Payment is made proceeds thereof for a purpose set forth in Section 5.10(b) (including the payment of dividends required or permitted pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under this Section 6.04(c6.08(a));
, (iivii) the Borrower and each Restricted Subsidiary the Subsidiaries may make dividend payments or other distributions payable solely in declare and pay cash dividends with respect to the Equity Interests (other than Disqualified Equity Interestsset forth on Schedule 6.08(a) to the extent, and only to the extent, required pursuant to the terms of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of or any other agreement in effect on the exercise price payable in connection with the exercise of such options or warrants;
Effective Date and (vviii) so long as no Default or Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Borrower may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire redeem or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members shares of the Board of Directors or employees Borrower’s and/or its Subsidiaries’ (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributeesincluding Rite Aid Lease Management Company’s) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that Preferred Stock (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies solely with Net Cash Proceeds received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries from issuances of its common stock after the Original Restatement Effective Date;
, provided that any such repurchase or redemption is effected within 150 days after the receipt of such proceeds or (viB) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or with other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable funds available to the Borrower and its Subsidiaries for any taxable yearif, (1) calculated by multiplying such income by the maximum combined tax rate applicable immediately after giving effect to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct redemption or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdingsrepurchase, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds Revolver Availability of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other more than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000100,000,000.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment payments or prepayments of Indebtedness created under the Senior Loan Documents;
(ii) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness permitted pursuant to Section 6.01(a);
(iiiii) Permitted Refinancing prepayments of Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of Section 6.01(a) with the proceeds of Indebtedness permitted pursuant to clause (vii), (viii) or (ix) of Section 6.01(a);
(iv) payments of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) provided no Default has occurred and is continuing or would result therefrom, Optional Debt Repurchases of Inside Indebtedness and, to the extent permitted by Section 6.01;
paragraph (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interestsc) of Holdings or any this Section, Optional Debt Repurchases of its direct or indirect parent;
(iv) [reserved];
(v) [reserved]Outside Indebtedness;
(vi) [reserved]repurchases, exchanges or redemptions of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified Preferred Stock;
(vii) [reserved]prepayments of Capital Lease Obligations in connection with the sale, closing or relocation of Stores;
(viii) prepayments of Indebtedness in connection with the incurrence of Refinancing Indebtedness permitted pursuant to Section 6.01(a)(ii) or (x);
(ix) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(iii), if permitted by the subordination provisions applicable to such Indebtedness; and
(viiix) prepayment unless an Event of Junior Financing owed Default shall have occurred and be continuing, mandatory prepayments of Indebtedness and interest under the New Notes and/or the Bridge Facility.
(c) The Borrower and the Subsidiaries will not effect Optional Debt Repurchases of Outside Indebtedness unless immediately prior and after giving effect to any such Optional Debt Repurchases, (x) no Default or Event of Default shall have occurred and be continuing and (y) the Borrower or a Restricted Subsidiary or the prepayment shall have Revolver Availability of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)more than $100,000,000.
Appears in 1 contract
Samples: Credit Agreement (Rite Aid Corp)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary of its Subsidiaries to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary Subsidiaries of the Borrowers may declare and pay dividends ratably with respect to their Equity Interests; and
(ii) GMI and GSMS may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary Parent and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary TAC may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted SubsidiariesCore Metals Group LLC, in each case upon the deathcase, disabilitythat, retirement or termination of employment of any such Person or otherwise in accordance when aggregated with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall pursuant to this Section 6.08(a)(ii), do not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not equal to exceed 100% of cumulative after-tax Combined Net Income for the cash proceeds period from July 1, 2010 through the end of key man life insurance policies received by the Borrower (most recent Fiscal Quarter or by Holdings and contributed Fiscal Year for which the Borrowers have delivered the financial statements required pursuant to the BorrowerSection 5.01(a) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b); provided, (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) at the time of and after giving effect to any such Restricted Payment there shall be made substantially concurrently with the closing exist no Default or Event of such Investment and Default, (B) Holdings shallboth before and after giving effect to any such Restricted Payment, immediately following the closing thereofBorrowers are in compliance with the covenants set forth in Section 6.13 on a pro forma basis, cause (1C) all property acquired at the time of and after giving effect to any such Restricted Payment, Availability is greater than $10,000,000 and (whether assets or Equity InterestsD) five Business Days prior to be contributed any such Restricted Payment, the Borrowers shall deliver to the Administrative Agent a certificate of a Financial Officer of each Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties in form and substance satisfactory to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with Administrative Agent certifying that the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii6.08(a)(ii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings met with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional such Restricted Payments in an amount not to exceed $3,000,000Payment.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary of its Subsidiaries to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, any Indebtedness other than payments in respect of any Junior Financing Subordinated Indebtedness to the extent prohibited by the subordination provisions thereofapplicable thereto;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;; and
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payment of Junior Financing owed to secured Indebtedness that becomes due as a result of the Borrower voluntary sale or a Restricted Subsidiary transfer of the property or the prepayment of Permitted Refinancing of assets securing such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Indebtedness.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any other Restricted Subsidiary to, make declare or paymake, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any Restricted Payment, or enter into any transaction the economic effect of which is substantially similar to any Restricted Payment, except (i) Holdings and the Borrower may declare and pay dividends with respect to their capital stock payable solely in additional shares of their respective common stock, (ii) Restricted Subsidiaries (other than the Borrower) may declare and pay dividends ratably with respect to their capital stock, (iii) Holdings may make Restricted Payments, not exceeding $3,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of Holdings and the Restricted Subsidiaries; (iv) so long as no Default shall have occurred and be continuing or result from the making of such payment, the Borrower may pay dividends to Holdings at such times and in such amounts as shall be necessary to permit Holdings to discharge, to the extent permitted hereunder, its permitted liabilities; (v) on and after the Leverage Target Date, Holdings may declare and pay dividends in cash with respect to its convertible preferred stock outstanding as of the Amendment No. 4 Effective Date in an amount not exceeding $40,000,000 in any fiscal year and the Borrower may declare and pay dividends to Holdings to permit Holdings to declare and pay such dividends and (vi) at any time after the consummation of the Structured Note Financing, the Borrower may declare and pay a dividend to Holdings so long as (x) the aggregate amount of such dividend shall not exceed the principal amount of the Structured Note Bridge Indebtedness outstanding at the time such dividend is paid plus accrued interest thereon, (y) no Default has occurred and is continuing or would result therefrom and (z) immediately upon receipt thereof, Holdings shall apply all of the proceeds of such dividend to repay in full the Structured Note Bridge Indebtedness then outstanding.
(b) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, make, directly or indirectly, any voluntary payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingHigh Yield Notes, any Qualifying Holdings Debt or any Qualifying Borrower Indebtedness (collectively "Specified Indebtedness"), or any voluntary payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, 112 cancellation or termination of any Junior Financing, Specified Indebtedness (or enter into any other payment (including any payment under any Swap Agreement) that has a transaction the economic effect of which is substantially similar effect to any of the foregoing), except:
(i) payment , provided no Default has occurred and is continuing or would result therefrom, payments of regularly scheduled interest as and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Specified Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Qualifying Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Indebtedness.
Appears in 1 contract
Samples: Credit Agreement (Williams Communications Group Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower Allied Waste will not, and nor will not it permit any Restricted Subsidiary to, make or pay, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make declare or make, or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingRestricted Payment, or incur any payment obligation (contingent or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreementotherwise) that has a substantially similar effect to any of the foregoingdo so, except:
(i) payment of regularly scheduled interest Allied Waste may declare and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, pay dividends with respect to such Junior Financing, other than payments its capital stock payable solely in respect additional shares of any Junior Financing prohibited by the subordination provisions thereofits capital stock;
(ii) Permitted Refinancing Restricted Subsidiaries of Indebtedness the Borrower may declare and pay dividends ratably with respect to the extent permitted by Section 6.01their capital stock;
(iii) Allied Waste may make Restricted Payments, not exceeding an aggregate amount of $25,000,000 during any fiscal year, pursuant to 119 and in accordance with the conversion stock option plans or other benefit plans or in connection with incentive or compensation arrangements for current or former management or employees of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of the Borrower and its direct or indirect parentRestricted Subsidiaries;
(iv) [reserved]the Borrower or any Restricted Subsidiary may declare and make dividend payments to Allied Waste solely to the extent necessary for Allied Waste to pay for taxes and to pay administrative expenses to conduct its business in accordance with Sections 5.01(b) and 6.10;
(v) [reserved]Allied Waste may declare and pay dividends in respect of the Sponsor Preferred Stock payable solely in additional shares of Sponsor Preferred Stock (or other capital stock, as provided therein) and at any time after June 30, 2004, the Borrower or any Restricted Subsidiary may pay cash dividends to Allied Waste in an aggregate cumulative amount of not more than $75,000,000 in order to permit Allied Waste to pay cash dividends on the Sponsor Preferred Stock (including on shares theretofore paid as dividends thereon in accordance with this clause (v)) and Allied Waste may use such dividends to pay cash dividends not exceeding an aggregate amount of $75,000,000 on such Sponsor Preferred Stock; provided in each case that no Default or Event of Default has occurred and is then continuing;
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a any Restricted Subsidiary or may pay cash dividends to Allied Waste in order to permit Allied Waste to pay cash dividends on the prepayment of Permitted Refinancing of Sponsor Preferred Stock (including on shares theretofore paid as dividends thereon in accordance with clause (v) hereof) and Allied Waste may use such Indebtedness with dividends to pay cash dividends on the proceeds of any other Junior FinancingSponsor Preferred Stock; provided, thathowever, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to all cash dividend payments in accordance with this clause (viii).vi) are subject to the satisfaction of the following additional conditions on the date of such dividend payment and after giving effect thereto:
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock; (ii) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to their Equity Interests; (iii) provided no Default then exists, or would be created thereby, the Borrower may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that Payments, not exceeding $250,000, in the case of aggregate, during any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerfiscal year, such Restricted Payment is made pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option profit sharing plans for management or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership employees of the Borrower and its Subsidiaries;
; (Div) cash dividends with respect to finance any Investment made by Holdings that, if made by the Borrower’s capital stock paid to Esmark by Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) at the time such Restricted Payment shall be dividends are made substantially concurrently with and immediately after giving effect to the closing making of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments (B) the proceeds of all such cash dividends shall be used by Esmark solely to pay taxes attributable to the Borrower and its Subsidiaries that are actually due and payable to a Governmental Authority by the Borrower and its Subsidiaries as part of group filing tax returns or a consolidated, combined, unitary or similar basis, and corporate overhead expenses of Esmark incurred in an the ordinary course of business (including expenses incurred in connection with insurance, officer, director and executive employee compensation, legal and accounting services, and the lease or leases of executive office space and the lease or ownership of office equipment therefor), and (C) the aggregate amount of all such cash dividends during any fiscal year of Esmark used to pay corporate overhead expenses of Esmark incurred in the ordinary course of business shall not to exceed $3,000,0006,000,000; and (v) the Borrower may make a cash dividend to Esmark in the amount of the proceeds of the Loans on the Effective Date in accordance with Section 5.08.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and regularly scheduled principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Subordinated Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;; and
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment payment of Junior Financing owed to secured Indebtedness that becomes due as a result of the Borrower voluntary sale or a Restricted Subsidiary transfer of the property or the prepayment of Permitted Refinancing of assets securing such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Indebtedness.
Appears in 1 contract
Samples: Term Loan Agreement (Esmark INC)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower FCX will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary Subsidiaries may make Restricted Payments declare and pay dividends ratably with respect to their capital stock (A) to shareholders other than FCX, (B) to FCX to the Borrower or any other Restricted Subsidiary; provided that extent the proceeds of such dividends are applied to pay operating expenses in the case ordinary course of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerbusiness, such Restricted Payment is made and (C) to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) FCX so long as (1) no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this under clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (ha) or (ib) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or would (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such payment;
(C) the proceeds of which dividends shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with paid during the closing pendency of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any Event of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;Default,
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvii) so long as no Event of Default shall have occurred and be continuing (or would shall result therefromfrom the payment thereof), additional Restricted Payments FCX may pay regularly scheduled quarterly dividends in respect of its preferred stock issued and outstanding on the Effective Date and effect regularly scheduled mandatory redemptions of its preferred stock issued and outstanding on the Effective Date, in each case, to the extent and in the amounts required by the terms of such preferred stock as in effect on the Effective Date,
(iii) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), FCX may, consistent with its dividend practices as of the Effective Date, and subject to the Incurrence Test, declare and pay dividends on its shares of common stock (and on shares of common stock issued upon the conversion of or in exchange for shares of FCX’s 5 1/2% Convertible Perpetual Preferred Stock outstanding on the Effective Date) in an amount in respect of any fiscal quarter not to exceed $3,000,0000.3125 per share of FCX’s common stock (adjusted as applicable to eliminate the effect of stock dividends, stock splits, reverse stock splits and other transactions in respect of such shares of common stock, and payable in respect of any shares of common stock received pursuant to any such stock dividend, stock split, reverse stock split or other transaction) (it being understood that Restricted Payments made in reliance on this clause (iii) in respect of shares of FCX’s common stock issued or sold after the Effective Date (or in respect of shares received in stock dividends, stock splits, reverse stock splits or other transactions in respect of such shares of common stock) involving either (x) a receipt of cash proceeds that increased the Restricted Uses Basket or (y) the receipt of assets in consideration for such common stock shall constitute Restricted Uses and shall reduce the Restricted Uses Basket (which reduction may be to less than zero)), and
(iv) so long as no Event of Default shall have occurred and be continuing (or shall result from the payment thereof), and subject to the Incurrence Test, FCX may make Restricted Payments in cash in any amounts to the extent that, immediately after giving effect thereto (and to any expenditure of cash required thereby), the Restricted Uses would not be greater than the Restricted Uses Basket.
(b) The Each Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any voluntary payment or other voluntary distribution (whether in cash, securities (other than common stock of FCX) or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents and payment of Ratable Obligations and Existing PD Obligations;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
6.01(a) (iii) including, without limitation, the conversion refinancing of any Junior Financing to Equity Interests (Indebtedness, other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parentthe Senior Notes, with Indebtedness permitted under Section 6.01(a)(xi));
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]prepayments of Indebtedness owed to FCX by a Restricted Subsidiary or owed to a Restricted Subsidiary by FCX or another Restricted Subsidiary, provided that prepayments of Indebtedness owed to a Restricted Subsidiary that is not a PCA Loan Party shall be permitted only to the extent no Event of Default has occurred and is continuing at the time of such prepayment, except that such prepayments shall be permitted (A) to the extent the proceeds of such prepayments are applied to pay operating expenses or to make Capital Expenditures in the ordinary course of business, and (B) to the extent the proceeds of such prepayments are applied to pay scheduled debt service of such Restricted Subsidiary so long as (1) no Event of Default under clause (a) or (b) of Article VII shall have occurred and be continuing and (2) if any Event of Default other than under clause (a) or (b) of Article VII shall have occurred and be continuing (or shall result from the payment thereof), so long as the Required Lenders shall not have given notice to FCX that such prepayments shall not be permitted to be paid during the pendency of such Event of Default;
(vi) [reserved]prepayments of any Project Financing to the extent made by the applicable Project Financing Subsidiary with cash from the operations of such Project Financing Subsidiary;
(vii) [reserved]payments of Indebtedness (other than Indebtedness referred to in clause (viii) below) that are not permitted by clauses (i)-(vi) of this Section 6.08(b) if and to the extent that after giving effect to any such payments, the Restricted Uses would not be greater than the Restricted Uses Basket; and
(viii) prepayment payments of Junior Financing owed to Indebtedness created under the Borrower or a Restricted Subsidiary or Parent Credit Agreement and the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no “Loan Party Documents” thereunder.
(c) Neither paragraph (a) nor paragraph (b) above shall make any prepayment of Junior Financing owed to prohibit any Restricted Subsidiary that Payment or payment of Indebtedness if after giving effect to such Restricted Payment or payment of Indebtedness (i) no Term Loan is outstanding under the Parent Credit Agreement and (ii) the sum of (A) the aggregate unused Revolving Commitments, (B) the aggregate unused Commitments (as defined in the Parent Credit Agreement) and (C) Available Domestic Cash shall be not a Loan Party pursuant less than $750,000,000.
(d) Each of paragraph (a) and paragraph (b) above shall cease to this clause (viii)be of effect from and after the first date upon which the corporate credit ratings of FCX by each of Moody’s and S&P are, respectively, Baa3 or better and BBB- or better.
Appears in 1 contract
Samples: Credit Agreement (Freeport McMoran Copper & Gold Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Holdings may declare and pay dividends with respect to its capital stock payable solely in additional shares of its common stock, (ii) Subsidiaries of the Borrower may declare and pay dividends ratably with respect to their capital stock, (iii) provided no Event of Default is continuing or would result therefore, Holdings and the Borrower may make Restricted Payments pursuant to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends plans or other distributions on the stock of the Borrower to Holdings paid and declared solely benefit plans for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise management or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations employees of Holdings, the Borrower and its Restricted Subsidiaries; provided that the amount thereof, taken together with any payments or transfers of cash, assets or debt securities pursuant to clause (f) of Section 6.09, do not exceed $15,000,000 in any fiscal year, (3iv) [reserved] provided no Event of Default is continuing or would result therefrom, the Borrower may pay dividends to Holdings at any time in such amounts as may be necessary to permit Holdings to pay its expenses and liabilities incurred in the ordinary course (4other than payments in respect of Indebtedness or Restricted Payments), (v) amounts due provided no Event of Default is continuing or would result therefrom, the Borrower may make Restricted Payments to Holdings, and payable pursuant Holdings may, in turn, make such Restricted Payments to any investor management agreement entered into the Parent (x) if the Leverage Ratio (determined on a pro forma basis after giving effect to such Restricted Payment) as of the last day of the period of four consecutive fiscal quarters most recently ended on or prior to the date of such Restricted Payment is less than 4.00 to 1.00 or (y) otherwise, in an aggregate amount not to exceed 50% of Quarterly Excess Cash Flow with respect to each fiscal quarter of the Sponsor Borrower ending on or after March 31, 2008 in which Quarterly Excess Cash Flow is greater than $0 minus 100% of the Effective Date absolute value of Quarterly Excess Cash Flow with respect to each fiscal quarter of the Borrower ending on or after March 31, 2008 in which Quarterly Excess Cash Flow is less than $0 minus the amount of any other Designated Excess Cash Expenditures made with such Quarterly Excess Cash Flow, (vi) Restricted Payments in amounts as shall be necessary to make Tax Payments; provided that all Restricted Payments made pursuant to this clause (vi) are used by the Parent or Holdings for the purpose specified in this clause (vi) within 30 days of receipt thereof, (vii) provided no Event of Default is continuing or would result therefrom, the Borrower may from time to time pay cash dividends to Holdings and Holdings may, in turn, use the proceeds thereof to pay cash dividends to the Parent, in each case in an amount not in excess of the regularly scheduled cash interest payable during the next period of 30 days on any Qualifying Parent Indebtedness (including Base Ultimate Parent QPI and Base Parent QPI), provided, however, that (A) any such dividends relating to any such cash interest payment must be paid not earlier than 30 days prior to the date when such cash interest is required to be paid by the Parent or the Ultimate Parent, as applicable, and the proceeds must (except to the extent prohibited by applicable subordination provisions) be applied by the Parent or the Ultimate Parent, as applicable, to the payment of such interest when due, (B) no payment of dividends may be made pursuant to this clause (vii) in respect of Indebtedness of the Parent or Ultimate Parent, as applicable, unless at the time of the incurrence of such Indebtedness (other than Base Parent QPI or Base Ultimate Parent QPI outstanding on the Closing Date), and after giving effect thereto, the QPI Issuance Conditions were satisfied, (C) no dividends may be made pursuant to this clause (vii) in respect of the Indebtedness described in clause (a)(ii) of the definition of Existing Parent Indebtedness and (D) the Borrower and its Subsidiaries shall be in Pro Forma Compliance after giving effect to the payment of any such dividends pursuant to this clause (vii), (viii) provided no Event of Default is continuing or would result therefrom, the Borrower may pay cash dividends to Holdings, and Holdings may, in turn, pay cash dividends to the Parent, and the Parent may, in turn, pay cash dividends to the Ultimate Parent, to the extent such cash is immediately recontributed as an equity contribution to the Parent and, in turn, to Holdings and, in turn, to the Borrower; provided that such contribution shall not constitute Equity Proceeds for purposes of this Agreement and (ix) provided no Event of Default is continuing or would result therefrom, the Borrower may make Restricted Payments to Holdings, and Holdings may, in turn, make such Restricted Payments to the Parent in an aggregate amount not to exceed $1,000,000 in 10,000,000 during any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Parent, Holdings and the Borrower will not, and nor will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Senior Subordinated Debt, Permitted Subordinated Indebtedness, Qualifying Parent Indebtedness, Non-Cash Pay Debt or other subordinated Indebtedness prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]prepayment of Capital Lease Obligations in an aggregate cumulative amount from and after the Closing Date not exceeding $5,000,000;
(vi) [reserved]provided no Event of Default is continuing or would result therefrom, Optional Repurchases of other Indebtedness (x) if the Leverage Ratio (determined on a pro forma basis after giving effect to such Optional Repurchase) as of the last day of the period of four consecutive fiscal quarters most recently ended on or prior to the date of such Optional Repurchase is less than 4.00 to 1.00 or (y) involving cumulative expenditures in any fiscal year not in excess of an amount equal to the Borrower’s Portion of Excess Cash Flow for the immediately preceding fiscal year less the amount of other Designated Excess Cash Expenditures made with such Borrower’s Portion of Excess Cash Flow;
(vii) [reserved]; and
provided no Event of Default is continuing or would result therefrom, Optional Repurchases of other Indebtedness made with Designated Equity Proceeds (viii) prepayment provided no Event of Junior Financing owed to Default is continuing or would result therefrom, refinancings or redemptions of the Borrower or a Restricted Subsidiary or Senior Unsecured Debt and the prepayment of Permitted Refinancing of such Indebtedness Senior Subordinated Debt with the proceeds of any other Junior FinancingIncremental Term Loans or Incremental Revolving Loans; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii).and
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any other Restricted Subsidiary to, make declare or paymake, directly or indirectly, any Restricted Payment, except:
(i) each Restricted Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingRestricted Payment, or enter into any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account transaction the economic effect of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a which is substantially similar effect to any of the foregoingRestricted Payment, except:
except (i) payment of regularly scheduled interest Holdings and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium the Borrower may declare and interest, and payment of fees, expenses and indemnification obligations, pay dividends with respect to such Junior Financingtheir capital stock payable solely in additional shares of their respective common stock, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing Restricted Subsidiaries (other than the Borrower) may declare and pay dividends ratably with respect to their capital stock, (iii) Holdings may make Restricted Payments, not exceeding $3,000,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for management or employees of Indebtedness Holdings and the Restricted Subsidiaries; (iv) so long as no Default shall have occurred and be continuing or result from the making of such payment, the Borrower may pay dividends to Holdings at such times and in such amounts as shall be necessary to permit Holdings to discharge, to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of hereunder, its direct or indirect parent;
(iv) [reserved];
permitted liabilities; (v) [reserved];
on and after the Leverage Target Date, Holdings may declare and pay dividends in cash with respect to its convertible preferred stock outstanding as of the Amendment No. 4 Effective Date in an amount not exceeding $40,000,000 in any fiscal year and the Borrower may declare and pay dividends to Holdings to permit Holdings to declare and pay such dividends and (vi) [reserved];
(vii) [reserved]; and
(viii) prepayment at any time after the consummation of Junior Financing owed to the Structured Note Financing, the Borrower or may declare and pay a Restricted Subsidiary or dividend to Holdings so long as (x) the prepayment of Permitted Refinancing aggregate amount of such dividend shall not exceed the principal amount of the Structured Note Bridge Indebtedness with outstanding at the time such dividend is paid plus accrued interest thereon, (y) no Default has occurred and is continuing or would result therefrom and (z) immediately upon receipt thereof, Holdings shall apply all of the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed such dividend to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)repay in full the Structured Note Bridge Indebtedness then outstanding.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Williams Companies Inc)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary the Borrower may make Restricted Payments declare and pay dividends with respect to its Qualified Equity payable solely in additional shares of its Qualified Equity, and, with respect to its Disqualified Equity, payable solely in additional shares of such Disqualified Equity (to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made extent permitted to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties incurred under Section 6.04(c))6.01) or in shares of its Qualified Equity;
(ii) the Borrower Subsidiaries may declare and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Personpay dividends ratably with respect to their Qualified Equity;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings)consistent with past practice, the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries Loan Parties may make Restricted Payments pursuant to and in cash to Holdings:
(A) cash dividends accordance with stock option plans or other distributions on the stock benefit plans for management or employees of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8Subsidiaries; and
(xviv) to the extent approved by the board of directors of the Borrower, the Borrower may declare and pay cash dividends with respect to its Equity Interests so long as no Event of Default shall have occurred and be continuing or would shall result therefromtherefrom after giving pro forma effect thereto; provided, additional Restricted Payments that if such cash dividends are funded with Indebtedness permitted hereunder, the Borrower shall be in an amount compliance with the financial covenants set forth in Section 6.12 both before and immediately after giving effect (including giving effect on a pro forma basis) to the payment of such dividends and the incurrence of such Indebtedness; provided that, notwithstanding the foregoing, in no event shall this Section 6.08 permit the distribution (whether in a single transaction or a series of transactions) of any intellectual property that is material to the business of the Borrower and its Subsidiaries (taken as a whole) to any Person other than a Loan Party or a wholly-owned Subsidiary; provided that the Borrower and its Subsidiaries may grant non-exclusive licenses of any intellectual property to any Subsidiary that is not a Loan Party in the ordinary course of business so long as the Borrower or such Subsidiary retains the beneficial ownership and the same rights to exceed $3,000,000use such intellectual property as held prior to such license.
(b) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness permitted under Section 6.01, other than (x) payments in respect of any Junior Financing Subordinated Indebtedness prohibited by the subordination provisions thereofthereof and (y) payments in respect of Permitted Convertible Notes;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05; and
(v) [reserved];
with respect to any Permitted Convertible Notes, (vix) [reserved];
the Borrower shall be permitted to make regularly scheduled non-default interest, coupon payments or additional interest expressly required by the terms thereof, (viiy) [reserved]; and
the Borrower may convert or exchange such Permitted Convertible Notes for any Equity Interests of the Borrower (viiitogether with cash in lieu of any fractional interest in any unit of such Equity Interests) prepayment pursuant to the terms of Junior Financing owed such Permitted Convertible Notes, or, to the extent it would not result in the occurrence of a default thereunder or an Event of Default hereunder, at a price that is more favorable to the Borrower or a Restricted Subsidiary or than the prepayment of Permitted Refinancing price dictated by the terms of such Indebtedness Permitted Convertible Notes, and (z) so long as at the time thereof and immediately after giving effect (including on a pro forma basis) thereto (1) no Default or Event of Default exists or would result therefrom, (2) the Senior Net Leverage Ratio (on a pro forma basis) is not greater than 3.25 to 1.00 and (3) the Borrower is in compliance with the financial covenants set forth in Section 6.12, the Borrower may repurchase, retire, redeem, acquire, cancel, terminate or defease such Permitted Convertible Notes pursuant to its terms (including, without limitation, the payment of cash in lieu of stock for the principal amount and/or conversion premium associated with such Permitted Convertible Notes, upon conversion of such Permitted Convertible Notes) in an aggregate principal amount not to exceed the original principal amount thereof, plus interest; provided that the Borrower shall not use the proceeds of any Loans for any payment, repurchase, retirement, redemption, acquisition, cancellation, termination or defeasance in respect of Permitted Convertible Notes (other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to than the Existing Convertible Notes) permitted under this clause (viiiSection 6.08(b)(v).
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary of Holdings and the Borrower may declare and pay dividends with respect to its common stock, payable solely in additional shares of its common stock, and Holdings may declare and pay dividends with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock, (iii) the Borrower may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by permit Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or make payments pursuant to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends plans or other distributions on the stock of the Borrower to Holdings paid and declared solely benefit plans for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise management or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations employees of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date Subsidiaries in an aggregate amount not to exceed $1,000,000 in 7,500,000 during any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a)year, (b), (hiv) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that may (A) such Restricted Payment shall be made substantially concurrently with redeem the closing Qualified Preferred Stock pursuant to a conversion into common stock of such Investment Holdings and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate make any Restricted Payments in connection with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investmentconversion, in each case case, in accordance with the requirements terms of Sections 5.11 and 5.12;
the Qualified Preferred Stock (E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(xv) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash at such times and in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) amounts (A) without duplication of not exceeding $3,000,000 during any Restricted Payment made pursuant to clause (B) belowfiscal year, Restricted Payments that the Borrower, in good faith, determines are reasonably as shall be necessary to effectuate the IPO Reorganization Transactions permit Holdings to discharge its corporate overhead (including franchise taxes and directors fees) and other permitted liabilities and to make payments permitted by Section 6.09 and (B) without duplication of as shall be necessary to pay any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount taxes that are due and payable by reason Holdings as part of any early termination of any such agreement or otherwisea consolidated group that includes the Borrower, to the extent that such amount exceeds taxes relate to the amount that would have been payable under such tax receivable agreement in the absence operations of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any futureand the Subsidiaries, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvvi) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Holdings may repurchase, redeem or retire its outstanding Equity Interests or make other Restricted Payments (and the Borrower may make Restricted Payments the proceeds of which are to be used by Holdings to effect such repurchases, redemptions or retirements or to redeem or repurchase Existing Senior Subordinated Notes or Senior Subordinated Notes) in an aggregate amount not to exceed (A) in the event the Net Leverage Ratio on a Pro Forma Basis as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available is greater than or equal to 2.00 to 1.00, (x) $10,000,000 minus (y) the aggregate amount of Restricted Payments and payments relating to the Subordinated Debt previously made pursuant to this clause (vi), (B) in the event the Net Leverage Ratio on a Pro Forma Basis as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available is less than 2.00 to 1.00 and greater than or equal to 1.50 to 1.00, (x) $25,000,000 minus (y) the aggregate amount of Restricted Payments and payments relating to the Subordinated Debt previously made pursuant to this clause (vi) and (C) in the event the Net Leverage Ratio on a Pro Forma Basis as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available is less than 1.50 to 1.00, (x) $40,000,000 minus (y) the aggregate amount of Restricted Payments and payments relating to the Subordinated Debt previously made pursuant to this clause (vi) and (vii) so long as no Default shall have occurred and be continuing or would result therefrom, Holdings may make Restricted Payments (and the Borrower may make Restricted Payments the proceeds of which are used by Holdings to make such payments) in an aggregate amount not to exceed $3,000,0002,000,000 during any fiscal year.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than payments in respect of any Junior Financing the Subordinated Debt or the Subordinated Promissory Note prohibited by the subordination provisions thereof;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reservedintentionally omitted];
(vi) [reserved];redemption, repurchase and retirement of Xxxxxxxxxxxx Xxxx (xxxxxxxxx xxx xxxxxxx (if any) and accrued and unpaid interest thereon to the date of such redemption, repurchase or retirement) with the Net Proceeds of any issuance of Equity Interests of Holdings during the period of four consecutive fiscal quarters ended immediately prior to the date of such redemption, repurchase or retirement (to the extent not previously applied to repurchase Subordinated Debt, to make Permitted Acquisitions, to make Capital Expenditures or to make investments under Section 6.04 (m)); and
(vii) [reserved]; andredemption, repurchase and retirement of Subordinated Debt (including any premium (if any) and accrued and unpaid interest thereon to the date of such redemption or repurchase), at any time during any fiscal year in an aggregate amount equal to (A) $25,000,000, plus (B) Retained Excess Cash Flow for the previous fiscal year (to the extent such Retained Excess Cash Flow has not been applied previously to make Permitted Acquisitions, to repurchase Subordinated Debt or to make Capital Expenditures) plus (C) the amount of payments permitted to be made under Section 6.08(a)(vi).
(viiic) prepayment If, as a result of Junior Financing owed to the receipt of any Net Proceeds by the Borrower or a Restricted any Subsidiary in connection with any sale, transfer or other disposition pursuant to Section 6.05(c) or (g), the Borrower would be required by the terms of the Senior Subordinated Debt Documents or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds terms of any Additional Senior Subordinated Notes to redeem or repurchase (or to make an offer to redeem or repurchase) any Existing Senior Subordinated Notes, Senior Subordinated Notes or Additional Senior Subordinated Notes, then the Borrower shall, or shall cause one or more of its Subsidiaries to, (i) prepay Term Loans in accordance with Section 2.11 as if such sale, transfer or disposition constituted a "Prepayment Event" or (ii) acquire real property, equipment or other Junior Financing; providedtangible assets, thatin each case in a manner that will eliminate any requirement to redeem or repurchase (or to make an offer to redeem or repurchase) such Existing Senior Subordinated Notes, no Loan Party shall make any Senior Subordinated Notes and Additional Senior Subordinated Notes. Any such prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party or acquisition pursuant to this clause (viii)c) shall be made prior to the first day on which the Borrower would be required to redeem or repurchase (or commence an offer to redeem or repurchase) Existing Senior Subordinated Notes, Senior Subordinated Notes or Additional Senior Subordinated Notes under the Senior Subordinated Debt Documents or the terms of any such Additional Senior Subordinated Notes, as applicable.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower No Loan Party will, nor will not, and will not it permit any Restricted domestic Subsidiary toto declare or pay any dividend (other than dividends payable solely in common stock of the Person making such dividend) on, or make any payment on account of, or payset apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Equity Interests or Subordinated Debt of any Loan Party or any Subsidiary, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Loan Party or any Subsidiary (collectively, “Restricted PaymentPayments”), exceptexcept that:
(ia) each Restricted any domestic Subsidiary may make Restricted Payments to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted wholly owned Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))Guarantor;
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions payable solely in the Equity Interests (other than Disqualified Equity Interests) of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(vb) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing continuing, the Borrower may purchase its common stock or common stock options from present or former officers or employees of any Loan Party or any Subsidiary upon the death, disability or termination of employment of such officer or employee, provided, that the aggregate amount of payments under this clause (b) after the date hereof (net of any proceeds received by the Borrower after the date hereof in connection with resales of any common stock or common stock options so purchased) shall not exceed $250,000 in any fiscal year of the Borrower;
(c) the Borrower may acquire Equity Interests of the Borrower in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise or in connection with the satisfaction of withholding tax obligations; and
(d) so long as (i) no Event of Default exists or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000.
(b) The Borrower will not, and will not permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior Financing, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoing, except:
(i) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments in respect of any Junior Financing prohibited by the subordination provisions thereof;
(ii) Permitted Refinancing of Indebtedness no Default exists or would result therefrom due to compliance with the extent permitted by Fixed Charge Coverage Ratio set forth in Section 6.01;
6.17 and (iii) the conversion Borrower has Availability of any Junior Financing at least $15,000,000 after giving effect to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to such dividends, the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed may pay dividends to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)its shareholders.”
Appears in 1 contract
Samples: Credit Agreement (Superior Offshore International Inc.)
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Alamosa Delaware nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each Restricted Subsidiary Alamosa Delaware may make Restricted Payments declare and pay dividends with respect to the Borrower or any other Restricted Subsidiary; provided that in the case of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrower, such Restricted Payment is made to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c));
(ii) the Borrower and each Restricted Subsidiary may make dividend payments or other distributions its capital stock payable solely in the Equity Interests (other than Disqualified Equity Interests) additional shares of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdingscommon stock, (ii) so long as Holdings Restricted Subsidiaries (other than the Borrower) may declare and the Borrower are treated as flow-through entities for U.S. federal income Tax purposespay dividends ratably with respect to their Capital Stock; provided, any federal, state and local income Taxes required that no distribution referred to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, in this clause (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (iii) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) by any Special Purpose Subsidiary unless such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation distribution is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole cash or in part of any shares of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms common Capital Stock pledged under the Pledge Agreement and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split no Default or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional (iii) Alamosa Delaware may make Restricted Payments, not exceeding $1,000,000 during any fiscal year pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of Alamosa Delaware and its Restricted Subsidiaries, (iv) at a time, in the case of both (x) and (y) below, when there does not exist a Default (or such distribution would not cause a Default), the Borrower may make distributions to Alamosa Delaware for the sole purpose of, and in an amount sufficient to fund, the payment of (x) principal at scheduled maturity and (y) interest when due as scheduled, in each case in respect of the 127/8% Senior Discount Notes and the 12 1/2% Senior Notes; provided, in the case of both (x) and (y), that such payment is due or to become due within 30 days from the date of such distribution and the cash distributed is in fact utilized to meet such payment obligation, (v) if no Default has occurred and is continuing, the Borrower may pay dividends to Alamosa Delaware and Alamosa Delaware may pay dividends, in each case at such times and in such amounts, not exceeding the lesser of (A) $1,000,000 and (B) $50,000,000 minus the amount of all other Permitted Equity Proceeds Uses at such time, during any fiscal year as shall be necessary to permit each of Alamosa Delaware, APCS and Superholdings to discharge its permitted liabilities, (vi) if no Default has occurred and is continuing, Alamosa Delaware, the Borrower and the other Restricted Subsidiaries may make Restricted Payments in an aggregate amount not to exceed $3,000,00050,000,000 minus the amount of all other Permitted Equity Proceeds Uses at such time and (vii) Restricted Payments may be made on the Effective Date as necessary to consummate the Transactions.
(b) The Neither Alamosa Delaware nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers payments not more than 30 days prior to repay, repurchase or redeem, mandatory prepayments of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to the date on which such Junior Financing, other than payments become due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness;
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved]payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) [reserved]the exchange, in a registered public offering, for the 12 1/2% Senior Notes of senior notes of Alamosa Delaware in an equivalent principal amount having the same terms and conditions as the 12 1/2% Senior Notes;
(vi) [reserved];payment of intercompany Indebtedness (A) among the Borrower and the Subsidiary Loan Parties, (B) by Alamosa Delaware to the Borrower or any Subsidiary Loan Party and (C) if no Default or Event of Default has occurred and is continuing, by the Borrower or any Subsidiary Loan Party to Alamosa Delaware; and
(vii) [reserved]; and
payment of Indebtedness under any Hedging Agreements permitted under Section 6.07 in connection with the termination (viiiincluding early termination) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with Hedging Agreements in the proceeds ordinary course of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)business.
Appears in 1 contract
Restricted Payments; Certain Payments of Indebtedness. (a) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:
(i) each Restricted Subsidiary may make Restricted Payments to of Holdings and the Borrower or any other Restricted Subsidiary; provided that may declare and pay dividends with respect to its common stock payable solely in the case additional shares of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary of the Borrowerits common stock, such Restricted Payment is made and, with respect to the Borrowerits preferred stock, any Restricted Subsidiary and to each other owner of Equity Interests payable solely in additional shares of such Restricted Subsidiary based on their relative ownership interests preferred stock or in shares of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under Section 6.04(c))its common stock;
(ii) the Borrower Subsidiaries may declare and each Restricted Subsidiary may make dividend payments pay dividends ratably with respect to their capital stock, membership or partnership interests or other distributions payable solely in the Equity Interests (other than Disqualified similar Equity Interests) of such Person;
(iii) [reserved];
Holdings may purchase or redeem (iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), and the Borrower may declare and pay dividends or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price payable in connection with the exercise of such options or warrants;
(v) so long as no Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments make other distributions to Holdings, the proceeds of which Holdings may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred are used by Holdings to finance the redemptionpurchase or redeem) Equity Interests of Holdings acquired by physicians who are party to a Management Services Agreement or employees, acquisition, retirement, repurchase consultants or settlement of such Equity Interest (or make Restricted Payments to allow any directors of Holdings’ direct or indirect parent companies to so redeem, retirethe Borrower, acquire or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members of the Board of Directors or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (any Subsidiary or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case Affiliated Practice upon the such Person’s death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights planemployment, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with provided that the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by such purchases or redemptions under this clause (viii) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries after the Effective Date3,000,000;
(vi) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable to the Borrower and its Subsidiaries for any taxable year, (1) calculated by multiplying such income by the maximum combined tax rate applicable to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdings, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(xiv) the Borrower may make Restricted Payments to allow Holdings to be used by Holdings solely to pay its franchise taxes and other fees required to maintain its corporate existence and to pay for general corporate and overhead expenses (aincluding salaries and other compensation of employees) incurred by Holdings in the ordinary course of its business, provided that such Restricted Payments shall not exceed $1,000,000 in any fiscal year,
(v) the Borrower may make Restricted Payments to Holdings in an amount necessary to enable Holdings to pay cash in lieu the Taxes directly attributable to (or arising as a result of) the operations of the issuance of fractional Equity Interests in connection with any dividendBorrower and the Subsidiaries, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) provided that (A) without duplication the amount of any Restricted Payment made pursuant to clause (B) below, such Restricted Payments shall not exceed the amount that the BorrowerBorrower and the Subsidiaries would be required to pay in respect of Federal, in good faithstate and local taxes were the Borrower and the Subsidiaries to pay such taxes as stand-alone taxpayers (including any interest or penalties thereon, determines are reasonably necessary to effectuate the IPO Reorganization Transactions if applicable) and (B) without duplication of any all Restricted Payments made to Holdings pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO this clause (v) are used by any IPO Shell Company entered into in connection with Holdings for the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason purposes specified herein within 20 days of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such accelerationreceipt thereof;
(xiivi) payments made or expected to be made by HoldingsHoldings may, not later than five Business Days following the Borrower or any Restricted Subsidiary in respect consummation of withholding or similar Taxes payable upon exercise the Physician Equity Offering, repurchase shares of its common stock from the Permitted Investors for aggregate consideration of not more than $10,000,000 using the proceeds of the Physician Equity Interests by any future, present or former employee, director, officer, manager or consultant Offering;
(or their respective controlled Affiliates or permitted transfereesvii) and any cashless repurchases of Equity Interests of Holdings deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxeswarrants;
(xiiiviii) the distributionBorrower may make Restricted Payments to Holdings to pay management, consulting and advising fees to the Sponsor or Sponsor Affiliates to the extent permitted by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests)Section 6.09;
(xivix) (on or after the date that is five years after the issuance of the applicable Qualified Sponsor Notes) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Borrower may make Restricted Payments to any direct or indirect parent company of Holdings in an amount necessary to permit Holdings to fund a pay interest (including interest accrued during the previous five fiscal years but only to the extent necessary to avoid significant original issue discount under Section 163(i)(2) of the Code) on the Qualified Sponsor Notes in an amount not to exceed the Available Amount, provided that (A) the Borrower has made all prepayments required pursuant to Section 2.11(d) prior to any such payment of dividends on such company’s common stock)interest, following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xvB) so long as no Event of Default shall have has occurred and be is continuing or would result therefrom, additional (C) immediately prior to and after giving effect to such payment of interest, the Borrower shall be in compliance with the Interest Expense Coverage Ratio on a pro forma basis as if all interest accruing in respect of such Qualified Sponsor Notes during the period of four fiscal quarters most recently ended had been paid in cash and (D) all Restricted Payments made pursuant to this clause (ix) are used by Holdings for the purposes specified herein within 20 days of receipt thereof;
(x) the Borrower may make Restricted Payments to Holdings in any fiscal year in an amount not to exceed $3,000,00050% of the Borrower’s Portion of Excess Cash Flow (and Holdings may make Restricted Payments with such amounts), provided that (A) immediately prior to and after giving effect to such Restricted Payment, the Leverage Ratio is less than or equal to 3.25 to 1.00, (B) no Default has occurred and is continuing or would result therefrom and (C) simultaneously with any Restricted Payment made pursuant to this clause (x), the Borrower shall prepay Tranche B Term Borrowings pursuant to clause (a) of Section 2.11 in an aggregate principal amount equal to such Restricted Payment;
(xi) the Borrower may make Restricted Payments to Holdings to pay any non-recurring fees, cash charges and cost expenses incurred in connection with the issuance of Equity Interests or Indebtedness, in each case, only to the extent that such transaction is not consummated;
(xii) payments to former stockholders of the Borrower in connection with the exercise of appraisal rights under applicable law; and
(xiii) the Merger Consideration paid on the Effective Date and the Delayed Equity Payments paid after the Effective Date.
(b) The Neither Holdings nor the Borrower will, nor will not, and will not they permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments payments as and when due in respect of principal premium and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financingany Indebtedness, other than (A) payments in respect of the Senior Subordinated Notes, any Junior Financing Additional Subordinated Debt, the Existing Senior Subordinated Notes or the Physician Notes prohibited by the subordination provisions thereofthereof and (B) payments in respect of the Qualified Sponsor Notes except as permitted by clause (ix) of Section 6.08(a);
(iiiii) Permitted Refinancing refinancings of Indebtedness to the extent permitted by Section 6.01;
(iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interests) of Holdings or any of its direct or indirect parent;
(iv) [reserved];payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and
(v) [reserved];
(vi) [reserved];
(vii) [reserved]; and
(viii) prepayment of Junior Financing owed to the Borrower or a Restricted Subsidiary or the prepayment of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)Delayed Equity Payments.
Appears in 1 contract
Samples: Credit Agreement (St. Louis Pharmaceutical Services, LLC)
Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make declare or paymake, or agree to pay or make, directly or indirectly, any Restricted Payment, except:
or incur any obligation (contingent or otherwise) to do so, except (i) each the Borrower may declare and pay dividends with respect to its common stock or Qualified Preferred Stock payable solely in additional shares of its common stock or Qualified Preferred Stock, (ii) Subsidiaries (other than those directly owned, in whole or part, by the Borrower) may declare and pay dividends ratably with respect to their common stock, (iii) the Borrower may declare and pay cash dividends with respect to its common stock and effect repurchases, redemptions or other Restricted Subsidiary Payments with respect to its common stock, together in an aggregate amount in any fiscal year of the Borrower not to exceed 50% of Consolidated Net Income (if positive) for the immediately preceding fiscal year of the Borrower; provided that immediately prior and after giving effect to any such payment no Default or Event of Default shall have occurred and be continuing and, immediately after giving effect to any such payment, the Borrower shall have Revolver Availability of more than $100,000,000, (iv) the Borrower may pay cash dividends in an amount not to exceed $60,000,000 in any fiscal year of the Borrower with respect to the Series E Preferred Stock, Series I Preferred Stock or any other Qualified Preferred Stock; provided that (x) immediately prior and after giving effect to any such payment, no Default or Event of Default shall have occurred and be continuing and (y) only so long as a Financial Covenant Effectiveness Period is then occurring, the Consolidated Fixed Charge Coverage Ratio for the period of four consecutive fiscal quarters most recently ended on or prior to the date of such payment, calculated on a pro forma basis as if such payment were made on the last day of such period (and excluding any such payments previously made pursuant to this clause during such four quarter period but attributed for purposes of this calculation to the last day of a prior period which day does not occur in such four quarter period) is not less than the ratio applicable to such period of four fiscal quarters under Section 6.12, (v) the Borrower and the Subsidiaries may make Restricted Payments consisting of the repurchase or other acquisition of shares of, or options to purchase shares of, capital stock of the Borrower or any of its Subsidiaries from employees, former employees, directors or former directors of the Borrower or any Subsidiary (or their permitted transferees), in each case pursuant to stock option plans, stock plans, employment agreements or other Restricted Subsidiaryemployee benefit plans approved by the board of directors of the Borrower; provided that in no Default has occurred and is continuing; and provided further that the case aggregate amount of such Restricted Payments made after the Original Restatement Effective Date shall not exceed $10,000,000, (vi) the Subsidiaries may declare and pay cash dividends to the Borrower; provided that the Borrower shall, within a reasonable time following receipt of any such Restricted Payment by a Restricted Subsidiary that is not a Wholly Owned Subsidiary payment, use all of the Borrower, such Restricted Payment is made proceeds thereof for a purpose set forth in Section 5.10(b) (including the payment of dividends required or permitted pursuant to the Borrower, any Restricted Subsidiary and to each other owner of Equity Interests of such Restricted Subsidiary based on their relative ownership interests of the relevant class of Equity Interests (it being understood and agreed that any cash distributed to a Subsidiary that is an owner of Equity Interests but is not a Loan Party shall be deemed to utilize on a dollar for dollar basis the basket for Investments by Loan Parties in non-Loan Parties under this Section 6.04(c6.08(a));
, (iivii) the Borrower and each Restricted Subsidiary the Subsidiaries may make dividend payments or other distributions payable solely in declare and pay cash dividends with respect to the Equity Interests (other than Disqualified Equity Interestsset forth on Schedule 6.08(a) to the extent, and only to the extent, required pursuant to the terms of such Person;
(iii) [reserved];
(iv) non-cash repurchases of Equity Interests in Holdings (or any direct or indirect parent of Holdings), the Borrower or any Restricted Subsidiary deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of or any other agreement in effect on the exercise price payable in connection with the exercise of such options or warrants;
Effective Date and (vviii) so long as no Default or Event of Default has occurred and is continuing or would immediately result therefrom, Restricted Payments to Holdings, which Holdings the Borrower may use to redeem, acquire, retire, repurchase or settle its Equity Interests (or any options, warrants, restricted stock or stock appreciation rights or similar securities issued with respect to any such Equity Interests) or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interest (or make Restricted Payments to allow any of Holdings’ direct or indirect parent companies to so redeem, retire, acquire redeem or repurchase their Equity Interests or to service Indebtedness incurred by Holdings to finance the redemption, acquisition, retirement, repurchase or settlement of such Equity Interests or to service Indebtedness incurred to finance the redemption, retirement, acquisition or repurchase of such Equity Interests), held directly or indirectly by current or former officers, managers, members shares of the Board of Directors Borrower's and/or its Subsidiaries' (including Rite Aid Lease Management Company's) Preferred Stock or employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Holdings (or any direct or indirect parent thereof), the Borrower and its Restricted Subsidiaries, in each case upon the death, disability, retirement or termination of employment of any such Person or otherwise in accordance with any stock option or stock appreciation rights plan, any management, director and/or employee stock ownership or incentive plan, stock subscription plan, employment termination agreement or any other employment agreements or equity holders’ agreement in an aggregate amount together with the aggregate amount of loans and advances to Holdings made pursuant to Section 6.04(l) in lieu of Restricted Payments permitted by this clause (v) not to exceed $1,000,000 in any calendar year with unused amounts in any calendar year being carried over to succeeding calendar years; provided that 4.75% Convertible Notes (A) the aggregate amount of all such Restricted Payments made on or after the Effective Date shall not exceed $5,000,000 and (B) such amount in any calendar year may be increased by an amount not to exceed the cash proceeds of key man life insurance policies solely with Net Cash Proceeds received by the Borrower (or by Holdings and contributed to the Borrower) or the Restricted Subsidiaries from issuances of its common stock after the Original Restatement Effective Date;
, provided that any such repurchase or redemption is effected within 150 days after the receipt of such proceeds or (viB) the Borrower and its Restricted Subsidiaries may make Restricted Payments in cash to Holdings:
(A) cash dividends or with other distributions on the stock of the Borrower to Holdings paid and declared solely for the purpose of funding, without duplication, (i) payments by Holdings in respect of taxes directly payable by Holdings attributable to its ownership of the Borrower, including any franchise or similar taxes directly payable by Holdings, (ii) so long as Holdings and the Borrower are treated as flow-through entities for U.S. federal income Tax purposes, any federal, state and local income Taxes required to be paid by the direct or indirect parent of Holdings on its taxable income attributable funds available to the Borrower and its Subsidiaries for any taxable yearif, (1) calculated by multiplying such income by the maximum combined tax rate applicable immediately after giving effect to a corporation or individual, whichever is higher, whose sole asset is its indirect interest in Borrower, (2) taking into account the character of income or gain and any allowable federal income tax deduction for state and local taxes, and (3) taking into account any carryovers of losses previously allocated by Holdings to such parent, to the extent such losses would be deductible in determining such parent’s tax liability for such year if such parent’s only items of income, gain and loss were those allocated to it by Holdings; provided that payments hereunder attributable to the taxable income of Borrower’s Unrestricted Subsidiaries shall be permitted only to the extent such Unrestricted Subsidiaries have made a corresponding payment to the Borrower and/or its Restricted Subsidiaries;
(B) the proceeds of which shall be used by Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent of Holdings to pay but only to the extent any such Restricted Payments in respect of any direct redemption or indirect parent of Holdings are actually paid in cash and reduce Consolidated Net Income of Holdings for the applicable period when paid) (1) [reserved], (2) any reasonable and customary indemnification claims made by members of the Board of Directors or officers, employees, directors or managers, consultants or independent contractors of Holdings (or any parent thereof) directly attributable to the ownership or operations of Holdingsrepurchase, the Borrower and its Restricted Subsidiaries, (3) [reserved] and (4) amounts due and payable pursuant to any investor management agreement entered into with the Sponsor on or after the Effective Date in an aggregate amount not to exceed $1,000,000 in any fiscal year of Holdings, so long as no Event of Default specified in Section 7.01(a), (b), (h) or (i) shall have occurred and be continuing or would result from such payment;
(C) the proceeds Revolver Availability of which shall be used by Holdings to pay ordinary course administrative, overhead and related expenses (including franchise Taxes (but not including income or similar Taxes) to extent directly attributable to the operations or ownership of the Borrower and its Subsidiaries;
(D) to finance any Investment made by Holdings that, if made by the Borrower, would be permitted to be made pursuant to Section 6.04; provided that (A) such Restricted Payment shall be made substantially concurrently with the closing of such Investment and (B) Holdings shall, immediately following the closing thereof, cause (1) all property acquired (whether assets or Equity Interests) to be contributed to the Borrower or a Subsidiary Loan Party or (2) the Person formed or acquired to merge into or consolidate with the Borrower or any of the Subsidiary Loan Parties to the extent such merger or consolidation is permitted in Section 6.03) in order to consummate such Investment, in each case in accordance with the requirements of Sections 5.11 and 5.12;
(E) the proceeds of which shall be used to pay (or to make Restricted Payments to allow Holdings or any direct or indirect parent thereof to pay) fees and expenses related to any equity offering not prohibited by this Agreement;
(F) [reserved];
(G) the proceeds of which are used to make concurrent payments permitted by clauses (b)(iv) and (b)(v) of this Section 6.07;
(vii) [reserved];
(viii) redemptions in whole or in part of any of its Equity Interests for another class of its Equity Interests (other more than Disqualified Equity Interests); provided that such new Equity Interests contain terms and provisions at least as advantageous to the Lenders in all respects material to their interests as those contained in the Equity Interests redeemed thereby;
(ix) [reserved];
(x) the Borrower may make Restricted Payments to allow Holdings to (a) pay cash in lieu of the issuance of fractional Equity Interests in connection with any dividend, split or combination thereof or any Permitted Acquisition (or other similar Investment) and (b) honor any conversion request by a holder of convertible Indebtedness and make cash payments in lieu of fractional shares in connection with any such conversion and may make payments on convertible Indebtedness in accordance with its terms;
(xi) (A) without duplication of any Restricted Payment made pursuant to clause (B) below, Restricted Payments that the Borrower, in good faith, determines are reasonably necessary to effectuate the IPO Reorganization Transactions and (B) without duplication of any Restricted Payments made pursuant to Section 6.07(a)(vi)(A)(ii), any customary payments required to be made pursuant to any tax receivables agreements entered into in connection with an with an “up-C” IPO by any IPO Shell Company entered into in connection with the IPO Reorganization Transactions, but excluding any accelerated lump sum amount payable by reason of any early termination of any such agreement or otherwise, to the extent such amount exceeds the amount that would have been payable under such tax receivable agreement in the absence of such acceleration;
(xii) payments made or expected to be made by Holdings, the Borrower or any Restricted Subsidiary in respect of withholding or similar Taxes payable upon exercise of Equity Interests by any future, present or former employee, director, officer, manager or consultant (or their respective controlled Affiliates or permitted transferees) and any repurchases of Equity Interests deemed to occur upon exercise of stock options or warrants if such Equity Interests represent a portion of the exercise price of such options or warrants or required withholding or similar taxes;
(xiii) the distribution, by dividend or otherwise, of shares of Equity Interests (other than Disqualified Equity Interests);
(xiv) the declaration and payment of Restricted Payment on Holdings’ or the Borrower’s common stock (or the payment of Restricted Payments to any direct or indirect parent company of Holdings to fund a payment of dividends on such company’s common stock), following consummation of an IPO, of up to 6.0% per annum of the net cash proceeds of such IPO received by or contributed to the Borrower, other than public offerings with respect to the IPO Entity’s common stock registered on Form S-8; and
(xv) so long as no Event of Default shall have occurred and be continuing or would result therefrom, additional Restricted Payments in an amount not to exceed $3,000,000100,000,000.
(b) The Borrower will not, and nor will not it permit any Restricted Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Junior FinancingIndebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation cancelation or termination of any Junior Financing, or any other payment (including any payment under any Swap Agreement) that has a substantially similar effect to any of the foregoingIndebtedness, except:
(i) payment payments or prepayments of Indebtedness created under the Senior Loan Documents;
(ii) payments of regularly scheduled interest and principal payments, mandatory offers to repay, repurchase or redeem, mandatory prepayments of principal premium payments as and interest, and payment of fees, expenses and indemnification obligations, with respect to such Junior Financing, other than payments when due in respect of any Junior Financing prohibited by the subordination provisions thereofIndebtedness permitted pursuant to Section 6.01(a);
(iiiii) Permitted Refinancing (A) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(v) or (vi) with the proceeds of Indebtedness permitted pursuant to Section 6.01(a)(v) or (vi) and (B) prepayments of Indebtedness permitted pursuant to Section 6.01(a)(vii) with the proceeds of Indebtedness permitted pursuant to Section 6.01(a)(vii);
(iv) payments of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(v) provided no Default has occurred and is continuing or would result therefrom, Optional Debt Repurchases of Inside Indebtedness and, to the extent permitted by Section 6.01;
paragraph (iii) the conversion of any Junior Financing to Equity Interests (other than Disqualified Equity Interestsc) of Holdings or any this Section, Optional Debt Repurchases of its direct or indirect parent;
(iv) [reserved];
(v) [reserved]Outside Indebtedness;
(vi) [reserved]repurchases, exchanges or redemptions of Indebtedness for consideration consisting solely of common stock of the Borrower or Qualified Preferred Stock;
(vii) [reserved]prepayments of Capital Lease Obligations in connection with the sale, closing or relocation of Stores;
(viii) prepayments of Indebtedness in connection with the incurrence of Refinancing Indebtedness permitted pursuant to Section 6.01(a)(ii) or (viii); and
(viiiix) prepayment prepayments of Junior Financing owed Indebtedness permitted pursuant to Section 6.01(a)(iii), if permitted by the subordination provisions applicable to such Indebtedness.
(c) The Borrower and the Subsidiaries will not effect Optional Debt Repurchases of Outside Indebtedness unless immediately prior and after giving effect to any such Optional Debt Repurchases, (x) no Default or Event of Default shall have occurred and be continuing and (y) the Borrower or a Restricted Subsidiary or the prepayment shall have Revolver Availability of Permitted Refinancing of such Indebtedness with the proceeds of any other Junior Financing; provided, that, no Loan Party shall make any prepayment of Junior Financing owed to any Restricted Subsidiary that is not a Loan Party pursuant to this clause (viii)more than $100,000,000.
Appears in 1 contract
Samples: Credit Agreement (Rite Aid Corp)
