Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except: (a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents; (b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; (c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing; (d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness; (e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty; (f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period; (g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance; (h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y); (i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business; (j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding; (k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments; (l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder; (m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course; (n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business; (o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; (p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice; (q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit; (r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof; (s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria; (i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof; (u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding; (v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding; (i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof; (x) Indebtedness with respect to any Permitted Receivables Financing; (y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and (z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 3 contracts
Sources: Credit Agreement (Burger King Worldwide, Inc.), Credit Agreement (Tim Hortons Inc.), Credit Agreement (New Red Canada Partnership)
Indebtedness. CreateNeither the Borrower nor any of the Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Closing Date and any refinancing thereof, of which any amount owed by a Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee of any Junior Financing or any Permitted Refinancing thereof shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of (x) $30,000,000 and (y) 2.25% of Consolidated Total Assets of the Borrower and its Subsidiaries (together with any Permitted Refinancing thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against the Borrower’s or mitigate any Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Subsidiary has actual assumed in connection with any Permitted Acquisition, provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that (x) such Indebtedness and all Indebtedness resulting from a Permitted Refinancing thereof is unsecured (except for Liens permitted by Section 7.01(w) securing Indebtedness (together with Permitted Refinancings thereof)) and (y) both immediately prior and after giving effect thereto, (1) no Default shall exist or anticipated exposure result therefrom (other than those in respect of shares of capital stock a Permitted Acquisition made pursuant to a legally binding commitment entered into at a time when no Default exists or other equity ownership interests of the Parent Borrower or any Subsidiarywould result therefrom), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii2) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancethe Borrower and its Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outscustomary earnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Original Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts in the ordinary coursecourse of business and any Guarantees thereof;
(m) Indebtedness of the Borrower or any of its Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of (x) $75,000,000 and (y) 5.50% of the Consolidated Total Assets of the Borrower and its Subsidiaries; provided that no more than the greater of $35,000,000 and 2.50% of Consolidated Total Assets of such Indebtedness shall be incurred under this clause (m) by Subsidiaries of the Borrower that are not Loan Parties;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the due date thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness Permitted Notes, the Net Proceeds of which are applied to the Parent Borrower or any Restricted Subsidiary permanent repayment of Term Loans pursuant to Section 2.05(b)(iii), (ii) Permitted Notes that are offered and sold on a pro rata basis to all Lenders that are “Qualified Institutional Buyers” (as defined in an aggregate Rule 144A under the Securities Act of 1933, as amended) holding Term Loans and in a principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Term Loans exchanged for such Permitted Refinancings in respect of Indebtedness originally incurred Notes pursuant to this clause procedures reasonably acceptable to the Administrative Agent (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00including procedures designed to comply with securities laws); provided further thatthat any Term Loans exchanged for such Permitted Notes shall be deemed to have been repaid immediately upon the effectiveness of such exchange, and (iii) in the case of any Indebtedness Permitted Notes incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date any of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, foregoing clauses (2i) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any ), Permitted Refinancing Refinancings thereof;
(s) Indebtedness incurred by a Non-Loan Party, Permitted Ratio Debt and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing Refinancings thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(yt) Indebtedness in respect of Permitted Debt Exchange the Senior Notes incurred pursuant to a Permitted Debt Exchange and the Senior Unsecured Notes (including, in accordance with Section 2.17 and each case, any guarantees thereof) and, in each case, any Permitted Refinancing thereof; and
(zu) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yt) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zu) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 3 contracts
Sources: Credit Agreement (Summit Materials, LLC), Credit Agreement (Summit Materials, Inc.), Credit Agreement (Summit Materials, Inc.)
Indebtedness. CreateNone of the Covenant Parties or any of their Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments or any refinancings thereof;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of the Senior Secured Notes (date hereof and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofrefinancing thereof and, until the first Business Day following the Pushdown Date, the Outstanding Indebtedness and (ii) intercompany Indebtedness outstanding on the date hereof evidenced by an Intercompany Note and any refinancing thereof evidenced by an Intercompany Note;
(c) (i) Indebtedness of the Parent Borrower Guarantees by any Covenant Party and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower any Covenant Party or any Restricted Subsidiary of a Covenant Party otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any Senior Subordinated Debt, Senior Unsecured Debt or Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower a Covenant Party or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, lease or improvement of a fixed or capital asset incurred by a Covenant Party or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) (i) entered into to hedge or mitigate risks to which the Parent Borrower Indebtedness of any Covenant Party or any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (v) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Debt Documentation as of the Pushdown Date, (w) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Covenant Parties and their Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Maturity Date of the Term Loans (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemption provisions satisfying the requirement of clause (y) hereof), (y) has actual or anticipated exposure terms and conditions (other than those in respect of shares of capital stock or other equity ownership interests interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Covenant Parties as the terms and conditions of the Parent Borrower Senior Subordinated Debt; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or any Subsidiary)drafts of the documentation relating thereto, stating that ▇▇▇▇▇▇▇ has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrowers within such five Business Day period that it disagrees with such determination (iiincluding a reasonable description of the basis upon which it disagrees) entered into in order to effectively cap, collar or exchange interest rates and (from fixed to floating rates, from one floating rate to another floating rate or otherwisez) with respect to any interest-bearing liability or investment of such Indebtedness described in the Parent Borrower or any Subsidiary and immediately preceding clause (iii) entered into to hedge commoditiesB), currencies, general economic conditions, raw materials prices, revenue streams or business performanceis incurred by a Loan Party;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (any Covenant Party or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by any Covenant Party or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (VNUHF or any direct or indirect parent thereof) of VNUHF permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent Disposition constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of any Covenant Party or any of its Restricted Subsidiaries, in an aggregate principal amount that at the ordinary coursetime of, and after giving effect to, the incurrence thereof, would not exceed $400,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness constituting the Senior Subordinated Debt and/or the Senior Unsecured Debt;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of non-Guarantor Subsidiaries incurred in the Parent Borrower or any Restricted Subsidiary ordinary course of business on ordinary business terms in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) 75,000,000 as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 6.01;
(t) Indebtedness of the Covenant Parties or the Restricted Subsidiaries (i) assumed in connection with any Permitted Acquisition or (ii) incurred to finance a Permitted Acquisition, in each case, that is 91 days secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests of a Person and including, for the avoidance of doubt, the assets owned by such Person) and so long as both immediately prior and after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 daysgiving effect thereto, (2A) such Indebtedness no Default shall not have mandatory prepayment, redemption exist or offer to purchase events more onerous than those applicable to the Term B Loansresult therefrom, (3B) the other terms Company and conditions of such Indebtedness the Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, and (excluding pricing and optional prepayment or redemption termsC) reflect market terms and conditions at the time of incurrence or issuance aggregate principal amount of such Indebtedness and (4) the maximum aggregate principal amount of all Indebtedness that may be incurred resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause paragraph (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereofdoes not exceed $200,000,000;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(zv) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yu) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 3 contracts
Sources: Credit Agreement (Nielsen Holdings B.V.), Credit Agreement (Nielsen Holdings B.V.), Credit Agreement (Global Media USA, LLC)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
Documents and (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount under this clause (ii) not to exceed $2,250,000,000 500,000,000 and any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and as listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee (other than Guarantees by a Foreign Subsidiary of Indebtedness of another Foreign Subsidiary) of any Senior Notes or any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section Section 7.02; provided that all such Indebtedness of advanced by any Loan Party owed to any Person that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness advanced by any Person that is not a Loan Party to any Loan Party shall be subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Financing Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets the applicable asset in an aggregate amount not to exceed (provided that A) the amount of such Indebtedness is incurred concurrently outstanding on the Closing Date plus (B) the greater of (1) $160,000,000 and (2) 30% of LTM Consolidated EBITDA, in each case determined at the time of incurrence at any time outstanding (together with or within two hundred seventy any Permitted Refinancings thereof but without giving effect to any increase in principal amount permitted under clause (270a) days after of the applicable acquisition, construction, repair, replacement or improvementproviso to the definition of “Permitted Refinancing”), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Restricted Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Restricted Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Restricted Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance, in each case incurred in the ordinary course of business and not for speculative purposes;
(i) Indebtedness of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition or similar Investment expressly permitted hereunder; provided that after giving pro forma effect to such Permitted Acquisition or Investment and the incurrence or assumption of such Indebtedness, the aggregate principal amount of such Indebtedness does not exceed (x) the greater of (1) $100,000,000 and (2) 20% of LTM Consolidated EBITDA at any time outstanding plus (y) any additional amount of such Indebtedness so long (A) if such incurred Indebtedness is secured by all or any portion of the Collateral on a pari passu basis with the Facilities, either (1) the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated First Lien Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted First Lien Ratio Debt, (B) if such Indebtedness is secured by all or any portion of the Collateral on a junior Lien basis to the Facilities, either (1) the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Secured Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted Junior Secured Ratio Debt or (C) if such Indebtedness is unsecured or not secured by all or any portion of the Collateral (and including all such Indebtedness of Restricted Subsidiaries that are not Loan Parties), either (1) either (I) the Consolidated Interest Coverage Ratio determined on a Pro Forma Basis would be greater than or equal to the Consolidated Interest Coverage Ratio immediately prior thereto or (II) the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Total Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted Unsecured Ratio Debt; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding the greater of (i) $200,000,000 and (ii) 35% of LTM Consolidated EBITDA, in each case determined at the time of incurrence; provided, further, that any Indebtedness incurred (but not assumed) pursuant to this clause (g) shall be subject to the requirements included in the first proviso under the definition of “Permitted Ratio Debt”, and (ii) any Permitted Refinancing thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current future, present or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estatesControlled Investment Affiliates or Immediate Family Members, spouses or former spouses in each case, to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstandingSection 7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries prior to the Closing Date or thereafter in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation purchase price or other similar arrangements incurred by such Person prior to the Closing Date or thereafter in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of (i) $230,000,000 and (ii) 37.5% of LTM Consolidated EBITDA at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has been Not Otherwise Applied;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 45 Business Days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) Indebtedness supported by incurred (x) and secured on a Letter of Credit in pari passu basis with the Facilities (“Incremental Equivalent First Lien Debt”) or (y) and secured on a principal amount not to exceed junior Lien basis with the face amount of such Letter of Credit;
Facilities and any Permitted Refinancing thereof (r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary “Incremental Equivalent Junior Lien Debt”), in an aggregate principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to under this clause (A) ((q), when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally Incremental Term Loans and Incremental Revolving Credit Commitments incurred pursuant to Section 2.14(d)(v) and Incremental Equivalent Unsecured Debt incurred pursuant to Section 7.03(w), not to exceed the Available Incremental Amount, so long as (x) if the proceeds of such Indebtedness are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption of any Indebtedness, no Event of Default under Sections 8.01(a) or (f) with respect to the Borrower shall have occurred and be continuing or would exist after giving effect to such Indebtedness, or (y) if otherwise, no Event of Default shall have occurred and be continuing or would exist after giving effect to such Indebtedness; provided that such Indebtedness shall (A) in the case of Incremental Equivalent First Lien Debt, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred (and in each case subject to the Permitted Earlier Maturity Indebtedness Exception); provided that the foregoing requirements of this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtednessshall not apply to the extent such Indebtedness constitutes a customary bridge facility, so long as either the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of this clause (xA) the Total Leverage Ratio and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges, (calculated on a Pro Forma BasisB) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)Incremental Equivalent First Lien Debt, (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysFacilities and, (2) such Indebtedness in the case of Incremental Equivalent Junior Lien Debt, shall not have mandatory prepayment, redemption or offer be subject to purchase events more onerous than those applicable scheduled amortization prior to maturity (and in each case subject to the Term B Loans, (3) Permitted Earlier Maturity Indebtedness Exception); provided that the other terms and conditions foregoing requirements of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (rB) and Section 7.03(v) by Non-Loan Parties shall not exceed apply to the greater extent such Indebtedness constitutes a customary bridge facility, so long as the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus this clause (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed conversion or exchange is subject only to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loansconditions customary for similar conversions or exchanges, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is secured on a junior Lien basis by a Loan Party with respect to Collateral, be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be subject to the First Lien Intercreditor Agreement, (D) in the case of Incremental Equivalent First Lien Debt in the form of a term loan facility of loans, be subject to the Loan Parties and is secured by a Lien on MFN Protection (but subject to the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso MFN Trigger Amount exception to Section 2.14(b)(iisuch MFN Protection) shall have been complied with as if such Indebtedness was considered were an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) have terms and conditions (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of other than (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisitionpricing, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtednessrate floors, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtednessdiscounts, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligationsfees, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing premiums and optional prepayment or redemption terms or provisions and (y) covenants or other provisions applicable only to periods after the maturity date Latest Maturity Date at the time of incurrence of such Indebtedness and to the extent any financial maintenance covenant is added for the benefit of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, to the extent that such financial maintenance covenant is also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, as applicable) that in the good faith determination of the Term Loans being refinancedBorrower (i) are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) or (ii) reflect market terms and conditions on (taken as a whole) at the date time of incurrence or issuance and such Indebtedness shall not participate (provided that a certificate of the Borrower as to the satisfaction of the conditions described in mandatory prepayments on a greater than pro rata basis with the Term Loans and this clause (E) the Parent Borrower has delivered at least five (5) Business Days prior to the Administrative Agent a certificate incurrence of a Responsible Officer of the Parent Borrowersuch Indebtedness, together with all relevant financial information reasonably requested by the Administrative Agent, including a reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one description of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify materials terms and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in one or more good faith that such terms and conditions satisfy the foregoing requirements of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in this clause (a) of this Section 7.03 and the Senior Secured Notes will E), shall be deemed to have been conclusive); provided, that any such Indebtedness incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interestby a Restricted Subsidiary that is not a Loan Party, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.together with
Appears in 3 contracts
Sources: Credit Agreement (Alight, Inc. / Delaware), Credit Agreement (Alight, Inc. / Delaware), Credit Agreement (Alight, Inc. / Delaware)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments (including any Indebtedness incurred pursuant to Section 2.14 or 2.15);
(b) (x) Indebtedness of outstanding on the Borrowers in respect of Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (y) intercompany Indebtedness outstanding on the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Closing Date and any Permitted Refinancing thereof; provided that any such intercompany Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a junior lien financing or Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness;
Indebtedness and (eC) any Guarantee by a Loan Party of Indebtedness of the Parent Borrower or any a Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary that is not a Loan Party shall only be permitted to the extent constituting an Investment permitted by Section 7.027.02(c)(iii);
(d) Indebtedness of the Borrower or any Restricted Subsidiary owing to any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) but only, in the case of Indebtedness of a non-Loan Party owing to a Loan Party, to the extent constituting an Investment permitted by Section 7.02(c)(iii); provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement improvements of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvementasset in an aggregate amount not to exceed the greater of $13,000,000 and 20% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Sale Leasebacks Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof; provided that any such Guarantees by Loan Parties of such Indebtedness of Restricted Subsidiaries that are not Loan Parties shall only be permitted to the extent constituting an Investment permitted by Section 7.02(c)(iii);
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed or incurred in connection with any Permitted Acquisition or other Investment not prohibited hereunder; provided that (i) solely in the case of assumed Indebtedness, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other Investment or any Permitted Refinancing thereof or (ii) after giving Pro Forma Effect to such Permitted Acquisition and the incurrence of such Indebtedness, as applicable, the aggregate principal amount not to exceed of such Indebtedness at any one time outstanding does not exceed the greater sum of (x) the greater of $100,000,000 16,250,000 and (y) 6.025% of Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) plus (y) additional indebtedness so long as the Consolidated Total Net Leverage Ratio is not greater than 4.25:1:00, in each case determined at the time of such assumption or incurrence, on a Pro Forma Basis in accordance with Section 1.09; provided that, in the Parent Borrower for case of clause (ii), (A) such Indebtedness does not mature prior to the most recently ended Test Period and (iii) any Permitted Refinancing date that is the Latest Maturity Date, or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of any Term Loan outstanding at the time such Indebtedness set forth is incurred or issued, (B) no Event of Default shall exist or result therefrom (other than in connection with a Limited Condition Transaction where the immediately preceding clauses (istandard shall be no Default under Section 8.01(a) or 8.01(f)) and (ii); provided that C) the aggregate principal amount at any time outstanding of such Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness of Restricted Subsidiaries that are non-Loan Parties incurred pursuant to clause (ii)) under this Section 7.03(f7.03(g) does shall not exceed the greater of (x) $350,000,000 9,750,000 and (y) 20.015% of Consolidated EBITDA of the Parent Borrower for determined at the most recently ended Test Period;
(g) Indebtedness in respect time of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancesuch incurrence on a Pro Forma Basis;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (Holdings or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by Holdings or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) of Holdings permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower Holdings or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder hereunder, merger or any DispositionDisposition permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower Holdings or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $22,750,000 and 35% of Consolidated EBITDA;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in currencies not available hereunder in an aggregate amount at any time outstanding not to exceed $5,000,000;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any incurred by a Restricted Subsidiary that is a non-Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(s) and then outstanding for all such Persons taken together, does not exceed the greater of $9,750,000 and 15% of Consolidated EBITDA (determined on a Pro Forma Basis in an aggregate amount not to exceed (A) $1,000,000,000 accordance with Section 1.09), in each case determined at the time of any incurrence pursuant to this clause incurrence;
(At) Credit Agreement Refinancing Indebtedness;
(when aggregated with the amount of Permitted Refinancings in respect of u) Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(iithe Cumulative Credit;
(v) belowIndebtedness of the Borrower or any of its Restricted Subsidiaries that is a Loan Party that complies with clauses (a), (c) plus and (Bd) unlimited additional unsecured or junior lien Indebtedness(as applicable) of the Applicable Requirements, so long as either no Default or Event of Default (limited in connection with Indebtedness incurred to finance a Limited Condition Transaction, to Defaults or Events of Default under Sections 8.01(a) and (f) and any other Default or Event of Default that is a condition to the effectiveness of the Limited Condition Transaction) is continuing or would result from the incurrence of such Indebtedness; provided that:
(i) if such Indebtedness is secured on a pari passu in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis and assuming all previously established and simultaneously established revolving credit facilities under this Section 7.03(v)(i) are fully drawn and excluding the cash proceeds of any borrowing under any such revolving credit facility) is no more than or equal to (x) 3.75:1.00 or (y) to the Total extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 3.75:1.00 and (II) the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(ii) if such Indebtedness is secured on a junior basis in right of security with the Obligations, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence the Consolidated Secured Net Leverage Ratio (calculated determined on a Pro Forma Basis) as of the end of the most recent Test Period is not greater no more than 7.00:1.00 (x) 4.00:1.00 or (y) to the Fixed Charge Coverage extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (I) 4.00:1,00 and (II) the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or Investment at the time of incurrence;
(iii) if such Indebtedness is unsecured, the aggregate principal amount of such Indebtedness shall not exceed an amount so long as on and as of the date of such incurrence (x) the Consolidated Total Net Leverage Ratio (calculated determined on a Pro Forma Basis) for the end of the most recent Test Period is not less no more than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans 4.25:1.00 or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loansextent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, the greater of (3I) 4.25:1.00 and (II) the other terms and conditions of Consolidated Total Net Leverage Ratio immediately prior to such Indebtedness (excluding pricing and optional prepayment Permitted Acquisition or redemption terms) reflect market terms and conditions Investment at the time of incurrence or issuance (y) the Interest Coverage Ratio (determined on a Pro Forma Basis) would not be less than (1) 2.00:1.00 or (2) to the extent incurred in connection with a Permitted Acquisition or other Investment permitted hereunder, either (I) 2.00:1.00 or (II) the Interest Coverage Ratio immediately prior to the consummation of such Permitted Acquisition or other Investment; provided that (A) the aggregate principal amount at any time outstanding of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness Subsidiaries that may be are non-Loan Parties incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 9,750,000 and (y) 25.015% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by determined on a Non-Loan Party, and guarantees thereof by Non-Loan PartyPro Forma Basis in accordance with Section 1.09), in an aggregate principal amount not to exceed (A) $600,000,000 each case determined at any one the time outstanding plus of incurrence and (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility that is not subordinated in right of payment to the Loan Parties Documents and that is secured by a Lien on the Collateral that is ranks pari passu in right of security with the Lien securing the ObligationsTerm Loans, the terms Term Loans shall be subject to the “most favored nation” pricing adjustment (if applicable) set forth in the proviso to Section 2.14(b)(ii2.14(e)(iii) shall have been complied with as if such Indebtedness was considered were an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer incurred thereunder. For purposes of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Ain this Section 7.03(v), (B)A) with respect to any Revolving Credit Commitments, (C), (D) a borrowing of the maximum amount of Loans available thereunder shall be assumed and (EB) to the extent the proceeds of any Indebtedness incurred under this Section 7.03(v) are used to repay Indebtedness, Pro Forma Effect shall be given to such repayment of Indebtedness.
(such w) Any Permitted Refinancings of Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii7.03(v); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (aSections 7.03(a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.7.03(w);
Appears in 3 contracts
Sources: Credit Agreement (Signify Health, Inc.), Credit Agreement (Signify Health, Inc.), Credit Agreement (Signify Health, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the GuarantorsRestatement Effective Date set forth on Schedule 9.3(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the Restatement Effective Date; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d9.3(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.039.3); provided thatthat (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty, and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness, and (ii) any Guarantee by the Borrower or any Subsidiary Guarantor of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by the Borrower or such Subsidiary Guarantor in such Restricted Subsidiary under Section 9.2(c);
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.029.2; provided that (i) all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth Intercompany Subordination Agreement and (ii) in Section 3.01 the event of any such Indebtedness in respect of the Guarantysale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(f) (i) Attributable Indebtedness relating to any transaction and other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)thereof; provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness ) at any one time outstanding incurred pursuant to this clause (ii)e) under this Section 7.03(f) does shall not exceed the greater of (x) $350,000,000 200,000,000 and (y) 20.03.00% of Consolidated EBITDA Total Assets, in each case determined at the time of the Parent Borrower incurrence; provided, further, that for the most recently ended Test Periodpurposes of determining compliance with this Section 9.3(e), Attributable Indebtedness shall not be deemed to arise from a sale leaseback transaction with respect to real property comprising a Store or distribution center that is originally treated under GAAP as an operating lease at the time such sale leaseback transaction is consummated but is subsequently treated under GAAP as a Capitalized Lease as the result of a change in GAAP (or interpretations thereof) after the Restatement Effective Date;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which against Holdings’, the Parent Borrower Borrower’s or any Subsidiary has actual or anticipated Restricted Subsidiary’s exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment commodities pricing risks incurred in the ordinary course of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancenot for speculative purposes and Guarantees thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(ig) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jh) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding9.6;
(ki) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lj) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(mk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(nl) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $100,000,000 and 2.75% of Total Assets, in each case determined at the time of incurrence; provided that a maximum of the greater of $25,000,000 and 1.00% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties, in each case determined at the time of incurrence;
(m) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(on) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater sum of (A) $1,925,000,000 plus (B) an amount equal to result of (x) $500,000,000 and 475,000,000 less (y) 30.0% the aggregate principal amount of Consolidated EBITDA any incremental indebtedness incurred in reliance of Section 2.18(3) of the Parent Borrower for Second Lien Term Facility Credit Agreement (as in effect on the most recently ended Test Period Restatement Effective Date), at any one time outstanding;
outstanding under the First Lien Term Facility or under any document governing Incremental Equivalent Term Debt (vas such term is defined in the First Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date)) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, amount of obligations in respect of (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness Specified Hedge Obligations and (B) if such Indebtedness is a term loan facility Cash Management Obligations (in the case of each of the Loan Partiesforegoing clauses (A) and (B), as defined in the First Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date)) at any time outstanding and not incurred in violation of Section 9.3(f), in each case and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof, provided that, for the avoidance of doubt, the Parent Borrower aggregate principal amount of incremental Indebtedness incurred pursuant to Section 9.3(p)(i)(b) and 9.3(q)(B) shall have been permitted not exceed $475,000,000;
(q) Indebtedness in an aggregate principal amount not to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed exceed the sum of (A) $625,000,000 plus (B) an amount equal to be the result of (x) $475,000,000 less (y) the aggregate principal amount of any incremental indebtedness incurred in reliance onof Section 2.18(3) of the First Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date), Section 2.14at any time outstanding under the Second Lien Term Facility or under any document governing Incremental Equivalent Term Debt (as such term is defined in the Second Lien Term Facility Credit Agreement (as in effect on the Restatement Effective Date)), and any Permitted Refinancing thereof, provided that, for the terms set forth in avoidance of doubt, the proviso aggregate principal amount of incremental Indebtedness incurred pursuant to Section 2.14(b)(iiSections 9.3(p)(i)(b) and 9.3(q)(B) shall have been complied not exceed $475,000,000;
(r) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with as if such Indebtedness was considered an Incremental Term Loan (such the principal amount of all other Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”r) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding25,000,000;
(i) other unsecured Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom areBorrower or any Restricted Subsidiary, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that so long as (A) such Indebtedness the Payment Conditions shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, have been satisfied after giving effect thereto and (B) as of the maturity date of the incurrence of such Indebtedness, the and Weighted Average Life to Maturity of such Indebtedness shall is at least six (6) months after the Latest Maturity Date at the time of incurrence of such Indebtedness and (ii) other Indebtedness that is secured and subordinated, provided that such Indebtedness (A) is not be shorter than secured by any Current Asset Collateral, (B) is subject to an intercreditor agreement containing terms that of then-remaining Term Loans being refinanced, are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement and (C) no Restricted Subsidiary has a maturity date and Weighted Average Life to Maturity that is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed at least six (6) months after the Obligations, (D) Latest Maturity Date at the terms and conditions time of incurrence of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof);
(xt) Indebtedness with respect to any Permitted Receivables Financing[reserved];
(yu) Indebtedness in respect of letters of credit issued for the account of any of the Subsidiaries of Holdings to finance the purchase of Inventory so long as (x) such Indebtedness is unsecured and (y) the aggregate face amount of such letters of credit does not exceed $100,000,000 at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the Restatement Effective Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the Restatement Effective Date) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Debt Exchange Notes Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred pursuant to a or assumed in connection with any Permitted Debt Exchange in accordance with Acquisition that is secured only by Liens permitted under Section 2.17 9.1(p) (and any Permitted Refinancing thereofof the foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to clause (v)(ii) does not exceed $50,000,000; provided that Indebtedness incurred under clause (i)(B) or clause (ii) of this paragraph (v) that is secured by assets of a type that would otherwise constitute Current Asset Collateral shall not exceed an aggregate amount outstanding of $25,000,000 and any such assets shall have been and at all times be segregated from, and not commingled with, Current Asset Collateral, with reasonably satisfactory evidence of compliance with the foregoing to be provided to the Administrative Agent promptly upon request; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yv) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums and other costs and expenses incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.039.3. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 3 contracts
Sources: Credit Agreement (BJ's Wholesale Club Holdings, Inc.), Credit Agreement (BJ's Wholesale Club Holdings, Inc.), Credit Agreement (BJ's Wholesale Club Holdings, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Unsecured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) Indebtedness existing on the date hereof (ix) Indebtedness with an individual value not in excess of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, $5,000,000 or (iiy) Surviving Indebtedness listed on Schedule 7.03(c) and in each case of the foregoing clauses (iiix) and (y), any Permitted Refinancing of any of the foregoingthereof;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, (x) if the Indebtedness being guaranteed is subordinated to the Loan Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Loan Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (y) Guarantee Obligations made by a Loan Party with respect to Indebtedness of a Non-Loan Party must be permitted pursuant to Section 7.02;
(e) Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 3.02 of the GuarantyGuaranty (but only to the extent permitted by applicable law and not giving rise to material adverse tax consequences);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed exceed, at the time of the incurrence thereof, the greater of (x) $350,000,000 90,000,000 and (y) 20.015.0% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts not for speculative purposes (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with obligations of non-wholly owned Foreign Subsidiaries that are Restricted Subsidiaries in respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, Disqualified Equity Interests in each case an amount not to the extent permitted by Section 7.02(y)exceed $10,000,000 at any time outstanding;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrowercompany) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current future, present or former directors, officers, directorsmembers of management, partners, managers, employees or consultants and employees, of the Borrower or any of its Subsidiaries or their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06(f);
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower (or any parent company) or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Transactions, the Spin-Off, Permitted Acquisitions or and/or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, cash pooling arrangements, purchase card and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) Indebtedness (whether secured or unsecured) (i) in an unlimited amount, of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary) after the date hereof and/or any other unsecured or junior lien Indebtedness of the Parent Borrower otherwise assumed in connection with an acquisition or any other Investment not prohibited hereunder, to the extent in the case of this clause (i), such Indebtedness was not incurred in contemplation of such acquisition or other Investment and such Indebtedness constitutes the obligations of only such newly acquired Restricted Subsidiary Subsidiary, (ii) incurred in connection with a Permitted Acquisition or other Investment not prohibited hereunder, in an aggregate principal amount for this clause (ii), not to exceed (A) $1,000,000,000 exceed, at the time of any the incurrence pursuant to this clause thereof, (A) the Fixed Incremental Amount (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally taking into account any amounts already incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) belowthereon) plus (B) an additional unlimited additional unsecured or junior lien Indebtedness, amount so long as either after giving Pro Forma Effect thereto (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to secured by a Lien on the date Collateral that is 91 days after pari passu with the Maturity Date of Lien on the Term B Loans or have a Weighted Average Life to Maturity less than Collateral securing the Weighted Average Life to Maturity of Obligations, the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall First Lien Leverage Ratio does not exceed the greater of (x1) $400,000,000 3.50:1.00 and (2) the First Lien Leverage Ratio at the end of the most recently ended Test Period, (y) 25.0% in the case of Consolidated EBITDA Indebtedness secured by a Lien on the Collateral that ranks junior to the Liens on the Collateral securing the Obligations, the Secured Leverage Ratio does not exceed the greater of 4.50:1.00 and the Parent Borrower for Secured Leverage Ratio at the end of the most recently ended Test Period and (z) in the case of Indebtedness that is unsecured or secured by assets that are not Collateral, either, at the Borrower’s option, (X) the Total Leverage Ratio does not exceed the greater of 4.50:1.00 and the Total Leverage Ratio at the end of the most recently ended Test Period or (Y) the Interest Coverage Ratio is no less than the lesser of 2:00:1.00 and the Interest Coverage Ratio at the end of the most recently ended Test Period and (iii) incurred for any one time outstanding purpose not prohibited by this Agreement, in an aggregate principal amount for clause (iii), not to exceed an unlimited amount so long as after giving Pro Forma Effect thereto (x) in the case of Indebtedness secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Obligations, the First Lien Leverage Ratio does not exceed 3.00:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 3.50:1.00 and the First Lien Leverage Ratio at the end of the most recently ended Test Period), (y) in the case of Indebtedness secured by a Lien on the Collateral that ranks junior to the Liens on the Collateral securing the Obligations, the Secured Leverage Ratio does not 4.50:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 4.50:1.00 and the Secured Leverage Ratio at the end of the most recently ended Test Period) and (z) in the case of Indebtedness that is unsecured or secured by assets that are not Collateral, either, at the Borrower’s option (X) the Total Leverage Ratio does not exceed 4.50:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 4.50:1.00 and the Total Leverage Ratio at the end of the most recently ended Test Period) or (Y) the Interest Coverage Ratio is no less than 2:00:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the lesser of 2.00:1.00 and the Interest Coverage Ratio at the end of the most recently ended Test Period); provided that, such Indebtedness incurred under clauses (ii) and (iii), (1) shall be subject only to the applicable Required Debt Terms, (2) (I) any Permitted Refinancing such Indebtedness of any Subsidiaries that are non-Loan Parties under the ratios specified in clause (ii)(B) (when taken together with any Indebtedness incurred by non-Loan Parties under clause (iii) of this Section 7.03(r) and Section 7.03(aa)) shall not exceed, at the time of the incurrence thereof, the greater of (X) $300,000,000 and (Y) 55.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period) and (II) any such Indebtedness of any Subsidiaries that are not Loan Parties under the ratios specified in clause (iii) shall not exceed (when taken together with any Indebtedness incurred by non-Loan Parties under clause (ii) of this Section 7.03(r) and Section 7.03(aa)), at the time of the incurrence thereof, the greater of (X) $300,000,000 and (Y) 55.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period and (3) in the case of any such Indebtedness in the form of Qualifying Term Loans incurred in reliance on clauses (ii)(B)(x) or (iii)(x), shall be subject to the MFN Provisions;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by any Non-Loan Party, (x) in an aggregate principal amount not to exceed exceed, at the time of the incurrence thereof, the greater of (Ai) $600,000,000 110,000,000 and (ii) 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period and (y) under working capital lines, lines of credit or overdraft facilities (to the extent such Indebtedness are not secured by assets constituting Collateral and are non-recourse to the Loan Parties) in an aggregate principal amount not to exceed, at any one the time outstanding plus of the incurrence thereof, the greater of (Bi) $50,000,000 and (ii) 10% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(t) Incremental Equivalent Debt;
(u) additional Indebtedness incurred from in an aggregate principal amount not to exceed, at the time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; of the incurrence thereof, the greater of (x) $250,000,000 and (y) 45% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(v) Indebtedness in an aggregate principal amount not exceeding the Available Amount, provided that (1i) at the time of the incurrence of such Indebtedness made utilizing amounts specified in clause (b) of the definition of “Available Amount”, no Specified Event of Default shall have occurred and be continuing or would result therefrom and (ii) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject only to a borrowing base or similar advance rate criteriathe applicable Required Debt Terms;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans or the replacement of Revolving Credit Commitments in accordance with Section 2.05(b)(iii); provided that (A) if such Indebtedness is secured on a junior basis to such Term Loans or Revolving Credit Loans, as applicable, or is unsecured, such Indebtedness shall not mature earlier than the date that is 91 days after the Maturity Date with respect to the relevant Term Loans or Revolving Credit Loans, as applicable, being refinanced, (B) other than Inside Maturity Loans, such Indebtedness shall not mature prior to the Maturity Date of the Term Loans or Revolving Credit Loans, as applicable, being refinanced and, as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness (other than revolving loans) shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) subject to clause (h) of the “Collateral and Guarantee Requirement”, such Indebtedness is not secured by any assets not securing the Obligations unless such assets substantially concurrently secure the Obligations, (E) the terms and conditions of such Indebtedness (excluding pricing pricing, call protection, premiums and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect shall be either, taken as a whole, no more favorable to the lenders providing such Indebtedness, in their capacity as such or, solely in the case such Indebtedness is refinancing the Term Loans, be on market terms and conditions on at the time of the establishment of such Indebtedness (in each case, as reasonably determined by the Borrower) (except for (x) covenants or other provisions applicable only to periods after the latest maturity date of the relevant Loans being refinanced or (y) to the extent any more restrictive covenant or provision is added for the benefit of (A) with respect to any such Indebtedness incurred as term B loans, such covenant or provision is also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Indebtedness or (B) with respect to any revolving facility or Customary Term A Loans, such covenant or provision (except to the extent only applicable after the maturity date of the Revolving Credit Facility) is also added for the benefit of the Revolving Credit Facility to the extent it remains outstanding after the incurrence of such Indebtedness; it being understood and agreed that in each such case, no consent of the Administrative Agent and/or any Lender shall be required in connection with adding such covenant or provision), and (F) such Indebtedness shall not participate be in mandatory prepayments on a greater than pro rata basis with principal amount in excess of the amount of Term Loans or Revolving Credit Commitments, as applicable, so refinanced except by an amount equal to unpaid accrued interest and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrowerpremium thereon plus other reasonable amounts paid and unused commitments, together with all relevant financial information and fees and expenses reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03incurred, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify connection with such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.refinanc
Appears in 3 contracts
Sources: Credit Agreement (Wyndham Hotels & Resorts, Inc.), Credit Agreement (Wyndham Hotels & Resorts, Inc.), Credit Agreement (Wyndham Destinations, Inc.)
Indebtedness. Create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan DocumentsParty pursuant to any Loan Document;
(b) Indebtedness of the Borrowers MLP or any Restricted Subsidiary to the MLP or any Restricted Subsidiary; provided that (x) Indebtedness owed by any Restricted Subsidiary that is not a Loan Party to the MLP, any Borrower or any Guarantor shall be subject to Section 7.8 and (y) Indebtedness owed by a Loan Party to any Restricted Subsidiary that is not a Loan Party shall be subordinated in respect right of payment to the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofObligations;
(c) Guarantee Obligations by (i) Indebtedness of the Parent Borrower and MLP or any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect Subsidiary of Indebtedness of the Parent MLP or any Restricted Subsidiary; provided that guarantees by the MLP, any Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue Guarantor of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to Section 7.8; and (ii) the subordination terms set forth in Section 3.01 of MLP or any Restricted Subsidiary pursuant to or contemplated by the GuarantyTransaction Documentation;
(fd) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(d) and any Permitted Refinancing thereof;
(e) Indebtedness of the MLP or any Restricted Subsidiary incurred in connection with any Sale and Leaseback Transaction provided that the amount of the Capital Lease Obligations outstanding at any time in connection with such Sale and Leaseback Transactions shall not exceed the greater of (A) $20,000,000 and (B) 2.0% of Consolidated Net Tangible Assets (determined at the time of incurrence) and in each case any Permitted Refinancing thereof;
(i) Attributable Indebtedness of the MLP and ▇▇▇▇▇ in respect of the Senior Notes in an aggregate principal amount not to exceed $150,000,000 and (ii) Guarantee Obligations of any other Borrower or Subsidiary Guarantor in respect of such Indebtedness;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(including Capitalized Leasesh) Indebtedness of the MLP or any Restricted Subsidiary consisting of the financing of insurance premiums;
(i) Indebtedness arising from agreements of the MLP or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or any Subsidiary;
(i) Indebtedness of any Person in existence on the date such Person becomes a Restricted Subsidiary as a result of an acquisition by the MLP or any Restricted Subsidiary or (ii) Indebtedness of the MLP or any Restricted Subsidiary incurred to finance the acquisition, construction, repairdevelopment, replacement design or improvement of fixed or capital any assets (real or personal), including Capital Lease Obligations, mortgage financings, industrial revenue bonds, purchase money obligations, Disqualified Equity Interests, synthetic lease obligations and any Indebtedness assumed in connection with the acquisition of any such assets (real or personal) or secured by a Lien on any such assets before the acquisition thereof; and any Permitted Refinancing thereof; provided that the aggregate principal amount of Indebtedness outstanding at any time and permitted by this clause (j) shall not exceed the greater of $110,000,000 and 12% of Consolidated Net Tangible Assets (determined at the time of incurrence), and in each case, any Permitted Refinancing thereof;
(k) (i) Acquired Debt or (ii) Indebtedness incurred to finance an acquisition of Persons that are acquired by the MLP or any Restricted Subsidiary or merged into the MLP or a Restricted Subsidiary in accordance with the terms hereof, provided that, (x) in the case of Indebtedness incurred under clause (ii) of this Section 7.2(k), after giving effect to such Indebtedness is incurred concurrently with acquisition and the Incurrence thereof (1) the Consolidated Leverage Ratio, calculated on a Pro Forma Basis, shall be equal to or within two hundred seventy (270) days after less than the applicable acquisitionConsolidated Leverage Ratio (including, constructionif such acquisition would result in the occurrence of a Specified Acquisition Period, repairany adjustments in the Consolidated Leverage Ratio resulting from the occurrence of such Specified Acquisition Period) for the most recently ended Test Period set forth in Section 7.1(a) minus 0.25 (e.g., replacement or improvement4.00 shall be reduced to 3.75), (y) in the case of Indebtedness incurred under clause (i), such Indebtedness shall not be secured unless the Consolidated Senior Secured Debt Ratio, calculated on a Pro Forma Basis, would be no greater than 1.50 to 1.00 for the most recently ended Test Period and (z) in the case of Indebtedness incurred under clause (i) or (ii) Attributable Indebtedness arising out of this Section 7.2(k) (1) the MLP is in compliance with Section 7.1 on a Pro Forma Basis and (2) no Event of Default shall have occurred and be continuing or would result therefrom and in each case, any Permitted Sale Leasebacks Refinancing thereof;
(l) Subordinated Debt in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period25,000,000;
(gm) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance[reserved];
(hn) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (MLP or any direct Restricted Subsidiary in connection with one or indirect parent more standby or trade-related letters of credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations, workers’ compensation claims, health or other types of social security benefits, surety bonds, completion guarantees or other similar bonds and obligations, including self-bonding arrangements, issued by the Parent Borrower) and its MLP or a Restricted Subsidiaries incurred Subsidiary in the ordinary course of businessbusiness or pursuant to self-insurance obligations and in each case not in connection with the borrowing of money or the obtaining of advances;
(jo) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance Hedging Agreements of the purchase or redemption of Equity Interests of Holdings (MLP or any direct Restricted Subsidiary not entered into for speculation;
(p) the incurrence by the MLP or indirect parent thereof) permitted by Section 7.06 Restricted Subsidiaries of liability in respect of Indebtedness of any Unrestricted Subsidiary of the MLP or any a partnership or joint venture that is not a Restricted Subsidiary, but only to the extent that such liability is the result of the MLP’s or any such Restricted Subsidiary’s being a general partner or member of, or owner of an aggregate amount equity interest in, such Unrestricted Subsidiary or partnership or joint venture and not as guarantor of such Indebtedness, not to exceed $20,000,000 at any one time outstandingoutstanding $25,000,000;
(kq) additional Indebtedness incurred by of the Parent Borrower MLP or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (Afor the MLP and all Restricted Subsidiaries) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (xA) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness 50,000,000 and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.05.0% of Consolidated EBITDA Net Tangible Assets (determined at the time of the Parent Borrower for the most recently ended Test Period incurrence) at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 outstanding and any Permitted Refinancing thereof; and
(zr) all premiums other Indebtedness of the MLP and its Restricted Subsidiaries so long as: (i) at the time of the incurrence or issuance of such Indebtedness, no Event of Default shall have occurred and be continuing or would result therefrom, (ii) the MLP is in compliance with Section 7.1 on a Pro Forma Basis after giving effect to such incurrence; provided that the Consolidated Leverage Ratio, calculated on a Pro Forma Basis, shall be equal to or less than the applicable Consolidated Leverage Ratio (including, if anysuch Indebtedness is incurred in connection with any acquisition that would result in the occurrence of a Specified Acquisition Period, any adjustments in the Consolidated Leverage Ratio resulting from the occurrence of such Specified Acquisition Period) for the most recently ended Test Period set forth in Section 7.1(a) minus 0.25 (e.g., 4.00 shall be reduced to 3.75), interest (including post-petition interest), fees, expenses, charges iii) such Indebtedness shall not mature nor have any scheduled amortization prior to the date that is one year after the Revolving Termination Date and additional or contingent interest on obligations described in clauses (aiv) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one terms of the categories documentation for such Indebtedness do not require the MLP or any of Indebtedness described in clauses (a) through (z) aboveits Restricted Subsidiaries to repurchase, the Parent Borrower shall, in its sole discretion, classify and reclassify repay or later divide, classify or reclassify redeem such item of Indebtedness (or make an offer to do any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under foregoing) upon the Loan Documents will be deemed happening of any event (other than as a result of an event of default thereunder or pursuant to have been incurred in reliance only on customary “change of control” provisions or asset sale offers) prior to the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed Revolving Termination Date or subject to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment in full of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03Obligations.
Appears in 3 contracts
Sources: Credit Agreement (SunCoke Energy Partners, L.P.), Credit Agreement (SunCoke Energy Partners, L.P.), Credit Agreement (SunCoke Energy Partners, L.P.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing refinancing thereof and (ii) intercompany Indebtedness outstanding on the Closing Date and any refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee of any Mezzanine Debt or Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset in an aggregate amount not to exceed $30,000,000 (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against the Borrower’s or mitigate any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary has actual (A) assumed in connection with any Permitted Acquisition, provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof or anticipated exposure (B) incurred to finance a Permitted Acquisition and any Permitted Refinancing thereof; provided that (w) in the case of clauses (A) and (B), such Indebtedness and all Indebtedness resulting from a Permitted Refinancing thereof is unsecured (except for Liens permitted by Section 7.01(w) securing Indebtedness (together with Permitted Refinancings thereof) incurred pursuant to clause (A) in an aggregate principal outstanding not to exceed $75,000,000 and Liens securing Indebtedness incurred pursuant to clause (A) permitted by Section 7.01(bb)), (x) in the case of clauses (A) and (B), both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom (other than those a Permitted Acquisition made pursuant to a legally binding commitment entered into at a time when no Default exists or would result therefrom), and (2) the Borrower and the Restricted Subsidiaries will be in respect Pro Forma Compliance with the covenants set forth in Section 7.11 and (y) in the case of shares of capital stock any such incurred Indebtedness under clause (B), such Indebtedness matures after, and does not require any scheduled amortization or other equity ownership interests scheduled payments of principal prior to, the seventh anniversary of the Parent Borrower or any Subsidiary)Closing Date; provided, (iifurther, that the amount of Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties under this Section 7.03(g) entered into shall not exceed $50,000,000 in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceaggregate;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outscustomary earnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts in the ordinary coursecourse of business;
(m) Indebtedness of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed $125,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the due date thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness constituting the Mezzanine Debt and any Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary Permitted Notes in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (principal amount, when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred Incremental Term Loans and Revolving Commitment Increases pursuant to this clause Section 2.14, not to exceed $150,000,000, (Aii) that are consummated to the extent Permitted Notes may not be issued in reliance on Section 7.03(r)(ii) below) plus the foregoing subclause (B) unlimited additional unsecured or junior lien Indebtednessi), so long as either (x) the Total Leverage Ratio (calculated Permitted Notes that are secured on a Pro Forma Basis) as of pari passu basis with the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, Obligations in an aggregate principal amount that would not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on cause the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral)First Lien Secured Leverage Ratio, (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated determined on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Basis as of the last day of the most recently ended Test Period is either (xfor which financial statements were required to have been delivered pursuant to Section 6.01(a) not greater than 4.00:1.00 or (yb), as applicable (or, if no Test Period has passed, as of the last four quarters ended), as if such Permitted Notes had been outstanding on the last day of such four quarter period, to exceed 2.75 to 1.00, (iii) not greater than Permitted Notes, the First Lien Senior Secured Leverage Ratio immediately prior Net Proceeds of which are applied to the consummation permanent repayment of Term Loans pursuant to Section 2.05(b)(iii), (iv) Permitted Notes that are offered on a pro rata basis to all Lenders that are “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended) holding Term Loans and in a principal amount not to exceed the amount of Term Loans exchanged for such Permitted Acquisition and Notes pursuant to procedures reasonably acceptable to the incurrence or assumption of Administrative Agent (including procedures designed to comply with securities laws); provided that any Term Loans exchanged for such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness Permitted Notes shall be deemed to be incurred in reliance on, Section 2.14have been repaid immediately upon the effectiveness of such exchange, and the terms set forth (v) in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan case of Permitted Notes incurred under any of the foregoing clauses (such Indebtedness incurred pursuant to this clause i), (B) being referred to as “Permitted Credit Facilities Acquisition Debt”ii), (iii) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Aiv), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing Refinancings thereof; and
(zt) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (ys) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zt) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 7.03, and the Senior Secured Notes (ii) all Indebtedness constituting Mezzanine Debt will be deemed to have been incurred be outstanding in reliance only on the exception set forth in clause (cq) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 3 contracts
Sources: Credit Agreement (SeaWorld Entertainment, Inc.), Credit Agreement (SeaWorld Entertainment, Inc.), Credit Agreement (SeaWorld Entertainment, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan DocumentsObligations;
(b) Indebtedness of the Borrowers (including any unused commitment in respect of thereof) outstanding on the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted in Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Junior Financing of any Loan Party shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Secured Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Secured Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Secured Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party), provided that, in the extent constituting case of Indebtedness of a non-Loan Party owing to a Loan Party, such Indebtedness is an Investment permitted by Section 7.027.02 or consists of any part of a Permitted Reorganization or IPO Reorganization Transaction; provided further that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Collateral Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the Secured Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, constructionlease or improvement of the applicable asset thereof in an aggregate amount not to exceed the greater of $3,750,000 and 12.5% of Trailing Four-Quarter Consolidated EBITDA, repair, replacement or improvement), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of such Attributable Indebtedness;
(f) Secured Hedge Obligations and other Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Indebtedness set forth Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the immediately preceding clauses (i) ordinary course of business and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 for speculative purposes and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodGuarantees thereof;
(g) Indebtedness in respect of Swap Contracts the Borrower or any Restricted Subsidiary (i) entered into to hedge assumed in connection with any Permitted Acquisition or mitigate risks to which the Parent Borrower other similar Investment permitted hereunder and any Permitted Refinancing thereof; provided that (x) such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other similar Investment permitted hereunder or any Subsidiary has actual Permitted Refinancing thereof and (y) the obligors with respect to such Indebtedness are limited to the Persons acquired in such Permitted Acquisition or anticipated exposure (other than those in respect of shares of capital stock Investment or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into incurred to finance any Permitted Acquisition or Investment permitted hereunder (including earn-out obligations, Indebtedness incurred to finance the payment thereof and seller notes); provided, that after giving pro forma effect to such Permitted Acquisition or Investment permitted hereunder and the incurrence of such Indebtedness, the aggregate amount of such Indebtedness incurred pursuant to this clause (ii) does not exceed at any time outstanding (x) the greater of $4,500,000 and 15.0% of Trailing Four Quarter Consolidated EBITDA, in order to effectively capeach case, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment determined as of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceapplicable date of incurrence;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former managers, officers, directors, partnersadvisors, managersservice providers, consultants and or employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in connection with the Transactions, a Permitted Acquisition, any other Investment expressly permitted hereunder hereunder, merger or any DispositionDisposition permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price adjustments or other similar adjustments (including earn-outs) or other similar adjustmentsouts and obligations in respect of transaction tax benefits);
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) (i) Secured Cash Management Obligations and Obligations, (ii) other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections Cash Management Services and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof, (iii) Indebtedness resulting from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business and solely with respect to each incurrence pursuant to this clause (iii), so long as such Indebtedness is extinguished within 10 Business Days of its incurrence, and (iv) endorsement of instruments or other payment items for deposit in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $10,000,000 and 33.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) to extent constituting Indebtedness, obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case case, in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) letters of credit in an aggregate face amount at any time outstanding not to exceed the greater of $3,000,000 and 10.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence consisting of (i) letters of credit issued in currencies not available hereunder or (ii) documentary or commercial letters of credit not issued hereunder;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(st) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Non-Restricted Subsidiary that is not a Loan PartyParty which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(u) and guarantees thereof by Non-Loan Partythen outstanding for all such Persons taken together, does not exceed the greater of $5,250,000 and 17.5% of Trailing Four Quarter Consolidated EBITDA, in an each case determined as of the date of incurrence;
(v) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to the Borrower or any of the Restricted Subsidiaries; provided, that the aggregate principal amount not to exceed (A) $600,000,000 of Indebtedness at any one time outstanding plus in connection therewith shall not exceed $15,000,000;
(Bw) additional [reserved];
(x) [reserved];
(y) unsecured Indebtedness incurred in an amount equal to the lesser of 100% of the net cash proceeds received by Holdings (or any direct or indirect parent thereof) since immediately after the Closing Date from time the issuance or sale of Equity Interests of Holdings (or any direct or indirect parent thereof) or cash contributed to time the capital of Holdings (or any direct or indirect parent thereof) (in each case, other than proceeds of Disqualified Equity Interests or sales of Equity Interests to Holdings (or any direct or indirect parent thereof) or any of its Subsidiaries) to the extent such net cash proceeds or cash have been contributed to the Borrower and have not been applied pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, 7.06 or 7.13 and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriado not constitute Cure Amounts;
(i) Indebtedness (in the form respect of senior secured, senior unsecured, senior subordinated, Other Term Loans and Other Notes incurred or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred issued in reliance on, accordance with Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) 2.14 and (ii) any Permitted Refinancing Refinancings thereof;
(uaa) additional Indebtedness incurred by the Borrower as a result of the exchange of Term Loans assigned to the Borrower pursuant to Section 10.07(k), as long as such Indebtedness would be a Permitted Refinancing of such Term Loans;
(bb) obligations in respect of Disqualified Equity Interests (x) issued to and held by the Borrower, Holdings or any Restricted Subsidiary (to the extent permitted by Section 7.02) or (y) in an aggregate principal amount not to exceed the greater of (x) $500,000,000 1,200,000 and (y) 30.04.0% of Trailing Four Quarter Consolidated EBITDA EBITDA, in each case, determined as of the Parent Borrower for the most recently ended Test Period at any one time outstandingdate of incurrence;
(vcc) intercompany Indebtedness incurred to finance or assumed in connection with a Permitted AcquisitionReorganization or IPO Reorganization Transaction, provided that (i) after giving Pro Forma Effect to so long as such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such intercompany Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been constitutes an Investment permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;7.02(j); and
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(ydd) Indebtedness in respect of Permitted Debt Exchange Notes aircraft or related equipment financing in an amount not to exceed $20,000,000 at any time outstanding (together with any amounts incurred under any Aircraft Trust Arrangement); provided, that, (I) any such Indebtedness that constitutes Pari Passu Secured Obligations shall be subject to the separate agreement among the Lenders entered into on the Closing Date or a Parity Intercreditor Agreement, as applicable, (II) any such Indebtedness that is incurred pursuant to Section 7.03(a), Section 7.03(s), Section 7.03(t), Section 7.03(u), Section 7.03(z) or Section 7.03(aa) and is secured by the Collateral on a Permitted Debt Exchange junior basis shall be subject to a Junior Intercreditor Agreement, and (III) any such Indebtedness that constitutes Pari Passu Secured Obligations or which is secured by the Collateral on a junior basis shall be junior in accordance right of payment to the Revolving Facility to the extent set forth in such agreement among Lenders or such Intercreditor Agreement. For purposes of determining compliance with Section 2.17 any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, Refinance, renew or defease other Indebtedness denominated in a foreign currency, and any Permitted such extension, replacement, refunding, Refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, Refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing thereof; and
(z) all Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, Refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums (if any), interest including tender premiums) and other costs and expenses (including OID) incurred in connection with such Refinancing. Interest (including post-petition interest), the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and premiums (if any), fees, expenses, charges and additional or contingent interest on obligations described shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in clauses (a) through (y) aboveaccordance with GAAP. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (aSections 7.03(a) through (z) above7.03(dd), the Parent Borrower shall, in its sole discretion, divide or classify and reclassify or later divide, classify divide or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents on the Closing Date will be deemed to have been be incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.03(a).
Appears in 3 contracts
Sources: Credit Agreement (AEVEX Corp.), Credit Agreement (AEVEX Corp.), Credit Agreement (AEVEX Corp.)
Indebtedness. CreateThe Borrower will not, and will not permit any Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries created under the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01, and modifications, replacements, restructurings, refinancings, refundings, renewals, amendments, restatements or extensions of any such Indebtedness; provided that the Borrowers amount of such Indebtedness is not increased at the time of such modification, replacement, restructuring, refinancing, refunding, renewal, amendment, restatement or extension (unless the additional amount is permitted pursuant to another provision of this Section 6.01) except by an amount equal to accrued but unpaid interest thereon, a reasonable premium or other reasonable similar amount paid, and reasonable fees and expenses incurred, in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofconnection with such modification, replacement, restructuring, refinancing, refunding, renewal, amendment, restatement or extension;
(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that (iA) Indebtedness of any Subsidiary that is not a Loan Party to the Parent Borrower and or any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(cother Loan Party shall be subject to Section 6.04(g) and (iiiB) any Permitted Refinancing Indebtedness of any of Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the foregoingSecured Obligations on terms reasonably satisfactory to the Administrative Agent;
(d) Guarantee Obligations Guarantees by the Borrower of the Parent Borrower Indebtedness of any Subsidiary and its Restricted Subsidiaries in respect by any Subsidiary of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02Subsidiary; provided that all such (A) the Indebtedness so Guaranteed is permitted under this Section 6.01, (B) Guarantees by the Borrower or any Subsidiary that is a Loan Party of Indebtedness of any Loan Party owed to any Person Subsidiary that is not a Loan Party shall be subject to Section 6.04(h) and (C) Guarantees permitted under this clause (d) shall be subordinated to the subordination terms set forth in Section 3.01 Secured Obligations of the Guarantyapplicable Subsidiary on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;
(e) Indebtedness consisting of guarantees resulting from endorsement of negotiable instruments for collection by Borrower or any other Loan Party incurred in the ordinary course of business;
(f) (i) Attributable Indebtedness incurred to finance Capital Expenditures, including Finance Lease Obligations, and other any Indebtedness (including Capitalized Leases) financing incurred or assumed in connection with the acquisition, constructionrestoration, repair, replacement construction or improvement of any fixed or capital assets, including real property, or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount (plus any accrued but unpaid interest (including any portion thereof which is payable in kind in accordance with the terms of such extended, renewed or replaced Indebtedness) and premium payable by the terms of such Indebtedness thereon and fees and expenses associated therewith), result in an earlier maturity date or decreased remaining weighted average life to maturity thereof or change the parties directly or indirectly responsible for the payment thereof; provided that such Indebtedness is incurred concurrently with prior to or within two one hundred seventy eighty (270180) days after such acquisition or the applicable acquisition, construction, repair, replacement completion of such construction or improvement); provided further that (A) if secured, (ii) Attributable Indebtedness arising out the collateral therefor consists solely of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 assets being financed, the products and proceeds thereof and books and records related thereto, and (yB) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate outstanding principal amount of such Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 15,000,000 and (y) 25% of Consolidated EBITDA as of the last day of the most recently ended Reference Period for which Financial Statements are available;
(g) Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (g) shall not exceed the greater of (x) $10,000,000 and (y) 20.0% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to Reference Period for which the Parent Borrower or Financial Statements are available at any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancetime outstanding;
(h) Guarantee Obligations Indebtedness incurred by Borrower or its Subsidiaries arising (A) from agreements providing for indemnification, adjustment of purchase price, working capital or similar obligations (including customary earn-outs, and any other deferred payments of a similar nature incurred in connection with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiariesany investment by any Subsidiary), in each case case, whether or not evidenced by a note, and incurred or assumed in connection with any Permitted Acquisition or any asset sale permitted under this Agreement or Investment permitted under this Agreement (any such obligations, “Deferred Acquisition Obligations”), or (B) from guarantees or letters of credit, surety bonds, bid bonds, appeal bonds, performance bonds or other similar obligations securing the performance of Borrower or any Subsidiary pursuant to the extent permitted by Section 7.02(y)such agreements;
(i) Indebtedness representing deferred compensation to employees in respect of treasury, depositary, cash management and netting services, automatic clearing house arrangements, overdraft protections and other financial accommodations of the Parent Borrower (nature described in the definition of “Banking Services” and otherwise in connection with securities accounts, deposit accounts and employees’ credit or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries purchase cards, in each case incurred in the ordinary course of business;
(j) Indebtedness consisting of financing of insurance premiums and other Indebtedness owed to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings any Person (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or including obligations in respect of purchase price (including earn-outsletters of credit, bankers’ acceptances or similar instruments issued for the benefit of such Person) providing workers’ compensation, health, disability or other similar adjustments;
(l) Indebtedness consisting of employee benefits or property, casualty, liability insurance, self-insurance, including pursuant to reimbursement or indemnification obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by to such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting servicesPerson, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary coursecourse of business consistent with past practice;
(k) Indebtedness under Swap Agreements permitted under Section 6.05;
(l) other Indebtedness in an aggregate principal amount not exceeding the greater of (x) $10,000,000 and (y) 20% of Consolidated EBITDA as of the last day of the most recently ended Reference Period for which Financial Statements are available at any time outstanding;
(m) Indebtedness of any Subsidiary as an account party in respect of trade letters of credit;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) usual and customary take or pay obligations contained in supply arrangements, in each case, arrangements incurred in the ordinary course of business;
(o) Indebtedness representing deferred compensation to employees incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect Indebtedness consisting of performancepromissory notes issued to current or former officers, bid, appeal directors and surety bonds and performance and completion guarantees and similar obligations provided by the Parent employees of Borrower or any Subsidiary, their respective estates, spouses or former spouses issued in exchange for the purchase or redemption by Borrower or such Subsidiary of its Restricted Subsidiaries or obligations in respect Equity Interests to the extent permitted by clause (vi) of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practiceSection 6.06(a);
(q) Indebtedness supported by a Letter of Credit in a principal amount any non-Loan Party Subsidiary incurred to finance working capital needs or for other general corporate purposes, not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or at any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed outstanding the greater of (x) $400,000,000 6,000,000 and (y) 25.010% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Reference Period is either for which Financial Statements are available;
(xr) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation letters of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred credit in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal (or face) amount of Indebtedness that may be incurred pursuant at any time outstanding not to this clause exceed (vi) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 20,000,000 and (y) 25.030% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Reference Period at any one time outstandingfor which Financial Statements are available plus (ii) the aggregate principal (or face) amount of letters of credit in existence on the Effective Date issued by financial institutions that are Lenders as of the Effective Date;
(is) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such constituting Indebtedness, the Weighted Average Life to Maturity judgments not constituting an Event of such Indebtedness shall not be shorter than that Default under clause (k) of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereofArticle VII;
(xt) Indebtedness arising from netting services, the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds and other Indebtedness arising in connection with respect to any Permitted Receivables Financing;
(y) Indebtedness deposit accounts, credit cards, purchasing cards and cash management services, in respect each case, in the ordinary course of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofbusiness; and
(zu) all premiums (if anyto the extent constituting Indebtedness, advances in respect of transfer pricing or shared services agreements that are permitted by Section 6.04(z), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 3 contracts
Sources: Credit Agreement (Clear Secure, Inc.), Credit Agreement (Clear Secure, Inc.), Credit Agreement (Clear Secure, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of Holdings, the Parent Borrower Company and any of its Subsidiaries under the Loan Documents;
(b) (i)(x) Indebtedness outstanding on the date hereof and listed on Schedule 7.03(b) and (y) any Permitted Refinancing thereof (to the extent (A) such Permitted Refinancing is incurred by the Person who is the obligor of the Borrowers Indebtedness subject to such Permitted Refinancing, (B) such Permitted Refinancing, if incurred by a Person who is not a Loan Party, is in respect of Indebtedness originally incurred by a Person who is not a Loan Party, or (C) such incurrence is otherwise permitted under this Section 7.03) and (ii) intercompany Indebtedness outstanding on the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofClosing Date;
(c) (i) Indebtedness of Guarantees by Holdings, the Parent Borrower Company and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness otherwise permitted hereunder of the Parent Borrower Company or any Restricted Subsidiary otherwise to the extent constituting an Investment permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this under Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)7.02; provided thatthat (A) no Guarantee by any Restricted Subsidiary of the Senior Subordinated Notes or any other Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guarantee and Security Agreement, (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders (in the reasonable good faith determination of the Company) as those contained in the subordination of such IndebtednessIndebtedness and (C) a Loan Party may not Guarantee Indebtedness of a Restricted Subsidiary that is not a Loan Party unless such Loan Party could have incurred such Indebtedness or such Guarantee is subordinated to the Obligations on the terms set forth in Section 5.1(b) of the Guarantee and Security Agreement;
(ed) Indebtedness of the Parent Borrower Company or any Restricted Subsidiary owing to the Parent Borrower Company or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that that, all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 5.1(b) of the GuarantyGuarantee and Security Agreement;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses clause (i) and (ii); provided that the aggregate principal amount of all Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) permitted under this Section 7.03(f7.03(e) does shall not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period50,000,000 at any time outstanding;
(gf) Indebtedness in respect of Swap Contracts incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Company or any Restricted Subsidiary (i) entered into to hedge assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into incurred to finance a Permitted Acquisition, in order each case, that is secured only by the assets or business (including any Equity Interests) acquired in the applicable Permitted Acquisition and so long as both immediately prior and after giving effect thereto, (A) no Event of Default shall exist or result therefrom, (B) the Company and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.10, such compliance to effectively capbe determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Indebtedness had been assumed or incurred as of the first day of the fiscal period covered thereby and evidenced by a certificate from the Chief Financial Officer of the Company demonstrating such compliance calculation in reasonable detail, collar (C) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (g) (together with the aggregate principal amount of Indebtedness incurred pursuant to Section 7.03(h)(y)) does not exceed $150,000,000, and (D) the aggregate principal amount of Indebtedness pursuant to this clause (g) and clause (h) below assumed by Restricted Subsidiaries that are not Loan Parties in connection with or exchange interest rates incurred by Restricted Subsidiaries that are not Loan Parties to finance Permitted Acquisitions of Persons that do not become Loan Parties and all Indebtedness resulting from any Permitted Refinancing thereof shall not exceed (from fixed to floating rates, from one floating rate to another floating rate or otherwiseI) with respect to any interest-bearing liability or investment such Permitted Acquisition, 65% of the Parent Borrower or any Subsidiary aggregate amount of consideration paid in respect thereof pursuant to Section 7.02(i)(B), and (iiiII) entered into with respect to hedge commoditiesall such Permitted Acquisitions, currencies(a) $175,000,000 for the period from the Closing Date to the first anniversary of the Closing Date, general economic conditions, raw materials prices, revenue streams or business performance(b) $200,000,000 for the period from the Closing Date to the second anniversary of the Closing Date and (c) $250,000,000 for the period from the Closing Date to the Maturity Date with respect to the Term Loans;
(h) Guarantee Obligations (i) Indebtedness of the Company and the Restricted Subsidiaries (A) assumed in connection with respect toany Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the Parent Borrower and its Restricted Subsidiariesforegoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (t) is unsecured, (u) both immediately prior and after giving effect thereto, (1) no Event of Default shall exist or result therefrom and (2) the Company and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.10, such compliance to be determined on the basis of the financial information most recently delivered to the extent Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Indebtedness had been assumed or incurred as of the first day of the fiscal period covered thereby and evidenced by a certificate from the Chief Financial Officer of the Company demonstrating such compliance calculation in reasonable detail, (v) subject to clause (y) below, matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Maturity Date of the Term Loans (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (w) hereof), (w) subject to clause (y) below, has terms and conditions (other than interest rate and other pricing terms, redemption and prepayment premiums and subordination terms) which, when taken as a whole, are not materially less favorable to the Lenders (in the reasonable good faith determination of the Company) than the terms and conditions of the Senior Subordinated Note Indenture as of the Closing Date; provided that the Company shall deliver to the Administrative Agent, at least five Business Days prior to the incurrence of such Indebtedness, a certificate of a Responsible Officer, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirement; (x) subject to clause (y) below, with respect to such Indebtedness described in the immediately preceding clause (B), is incurred by the Company or a Subsidiary that is a Loan Party; (y) the aggregate principal amount of such Indebtedness incurred pursuant to clause (B) and all Indebtedness resulting from any Permitted Refinancing thereof, in each case which Indebtedness or Refinancing Indebtedness would otherwise not be permitted by clauses (v), (w) or (x) above, at any time outstanding pursuant to this paragraph (h) (together with the aggregate principal amount of Indebtedness incurred pursuant to Section 7.02(y7.03(g) and all Indebtedness resulting from any Permitted Refinancing thereof) does not exceed $150,000,000, and (z) the aggregate principal amount of Indebtedness pursuant to clause (g) above and this clause (h) assumed by Restricted Subsidiaries that are not Loan Parties in connection with or incurred by Restricted Subsidiaries that are not Loan Parties to finance Permitted Acquisitions of Persons that do not become Loan Parties and all Indebtedness resulting from any Permitted Refinancing thereof shall not exceed (I) with respect to any such Permitted Acquisition, 65% of the aggregate amount of consideration paid in respect thereof pursuant to Section 7.02(i)(B), and (II) with respect to all such Permitted Acquisitions, (a) $175,000,000 for the period from the Closing Date to the first anniversary of the Closing Date, (b) $200,000,000 for the period from the Closing Date to the second anniversary of the Closing Date and (c) $250,000,000 for the period from the Closing Date to the Maturity Date with respect to the Term Loans;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of Company and the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness consisting of promissory notes issued by any Loan Party to current or former officers, directors, partners, managers, consultants directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(k) Indebtedness incurred by the Parent Borrower Company or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of (i) obligations of Holdings, the Parent Borrower Company or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderhereunder or (ii) unsecured Indebtedness at any time outstanding that is owed to the seller of a business in a Permitted Acquisition to the extent constituting consideration for such Permitted Acquisition, provided that (x) such Indebtedness shall not mature or amortize any principal prior to the date that is 91 days after the Maturity Date with respect to the Term Loans, (y) unless, as of the last day of the immediately preceding Test Period (after giving Pro Forma Effect to the incurrence of such Indebtedness) the Total Leverage Ratio is less than 4.00:1.00, the aggregate amount of such Indebtedness shall not exceed $25,000,000 outstanding at any time and (z) such Indebtedness shall not be incurred in contemplation of the transfer by such seller to one or more financial institutions;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts incurred in the ordinary coursecourse of business in connection with cash management activities;
(n) Indebtedness in an aggregate principal amount not to exceed $200,000,000 at any time outstanding;
(o) Indebtedness consisting of (a) the financing of insurance premiums with the providers of such insurance or their affiliates or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Parent Borrower Company or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower Company or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of any Existing Notes not tendered and purchased on the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence Closing Date pursuant to this clause the Existing Note Indenture;
(At) (when aggregated with the amount of Permitted Refinancings Indebtedness in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Senior Subordinated Notes and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingForeign Jurisdiction Deposits;
(v) Indebtedness incurred of Holdings represented by the obligations of Holdings to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date make payments with respect to the relevant Term Loans being refinanced, (B) as cancellation or repurchase of the date its common stock or stock options or warrants in respect of the incurrence of such Indebtedness, the Weighted Average Life its common stock granted to Maturity of such Indebtedness shall not be shorter than management investors; provided that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor any payments with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which obligations shall have previously or substantially concurrently guaranteed the Obligations, be subject to Section 7.06;
(Dw) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate extent constituting Indebtedness, judgments, decrees, attachments or awards not constituting an Event of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (ADefault under Section 8.01(h), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) to the extent constituting Indebtedness, Indebtedness with in respect to any Permitted Receivables Financingof the Holdings PIK Preferred;
(y) Indebtedness in respect resulting from an Investment permitted by clauses (e)(i), (m) or (p) of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof7.02; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Readers Digest Association Inc), Credit Agreement (Direct Holdings Libraries Inc.)
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantorsdate hereof set forth on Schedule 9.3(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the date hereof; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d9.3(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.039.3); provided thatthat (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty, and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness, and (ii) any Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by such Loan Party in such Restricted Subsidiary under Section 9.2(c);
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.029.2; provided that (i) all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth Intercompany Subordination Agreement and (ii) in Section 3.01 the event of any such Indebtedness in respect of the Guarantysale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), improvement and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks sale-leaseback transactions, and, in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) each case, any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)thereof; provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness at any one time outstanding incurred pursuant to this clause (ii)e) under this Section 7.03(f) does shall not exceed the greater of (x) $350,000,000 50,000,000 and (y) 20.01.75% of Consolidated EBITDA Total Assets, in each case determined at the time of the Parent Borrower for the most recently ended Test Periodincurrence;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which against Holdings’, the Parent Borrower Borrower’s or any Subsidiary has actual or anticipated Restricted Subsidiary’s exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment commodities pricing risks incurred in the ordinary course of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancenot for speculative purposes and Guarantees thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(ig) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jh) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding9.6;
(ki) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lj) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(mk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(nl) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $100,000,000 and 3.25% of Total Assets, in each case determined at the time of incurrence; provided that a maximum of the greater of $25,000,000 and 1.00% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties, in each case determined at the time of incurrence;
(m) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(on) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed $1,475,000,000 at any time outstanding under the Term Facility and (ii) the amount of obligations in respect of (ii)(A) obligations under Secured Hedge Agreements and (B) Cash Management Obligations (in the case of each of the foregoing clauses (A) $600,000,000 and (B), as defined in the Term Facility Credit Agreement) at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateralincurred in violation of Section 9.3(f), in each case and, in respect of clauses (2i) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriaii), any Permitted Refinancing thereof;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as respect of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, Senior Notes (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”any guarantees thereof) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(vr) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as principal amount of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such all other Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”r) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding25,000,000;
(i) other unsecured Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom areBorrower or any Restricted Subsidiary, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that so long as (A) such Indebtedness the Payment Conditions shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, have been satisfied after giving effect thereto and (B) as of the maturity date of the incurrence of such Indebtedness, the and Weighted Average Life to Maturity of such Indebtedness shall is at least six (6) months after the Latest Maturity Date at the time of incurrence of such Indebtedness and (ii) other Indebtedness that is secured and subordinated, provided that such Indebtedness (A) is not be shorter than secured by any Current Asset Collateral, (B) is subject to an intercreditor agreement containing terms that of then-remaining Term Loans being refinanced, are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement and (C) no Restricted Subsidiary has a maturity date and Weighted Average Life to Maturity that is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed at least six (6) months after the Obligations, (D) Latest Maturity Date at the terms and conditions time of incurrence of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof);
(xt) Indebtedness with respect to any Permitted Receivables Financing[reserved];
(yu) Indebtedness in respect of letters of credit issued for the account of any of the Subsidiaries of Holdings to finance the purchase of Inventory so long as (x) such Indebtedness is unsecured and (y) the aggregate principal amount of such Indebtedness does not exceed $50,000,000 at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the date hereof, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the date hereof) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Debt Exchange Notes Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred pursuant to a or assumed in connection with any Permitted Debt Exchange in accordance with Acquisition that is secured only by Liens permitted under Section 2.17 9.1(p) (and any Permitted Refinancing thereofof the foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to clause (v)(ii) does not exceed $50,000,000; provided that Indebtedness incurred under clause (i)(B) or clause (ii) of this paragraph (v) that is secured by assets of a type that would otherwise constitute Current Asset Collateral shall not exceed an aggregate amount outstanding of $25,000,000 and any such assets shall have been and at all times be segregated from, and not commingled with, Current Asset Collateral, with reasonably satisfactory evidence of compliance with the foregoing to be provided to the Administrative Agent promptly upon request; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yv) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums and other costs and expenses incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.039.3. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (Chinos Holdings, Inc.), Credit Agreement (J Crew Group Inc)
Indebtedness. CreateThe Borrower will not, incurand will not permit any Restricted Subsidiary to, assume or suffer to exist Incur any Indebtedness, except:
(a) Indebtedness of existing on the Parent Borrower Effective Date and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 set forth on Schedule 6.01 and any Permitted Refinancing thereofIndebtedness incurred to Refinance such Indebtedness;
(i) Indebtedness created hereunder and under the other Loan Documents, including any Indebtedness created under Section 2.20 or 2.21 hereof and (ii) (A) any Credit Agreement Refinancing Indebtedness Incurred to Refinance (in whole or in part) such Indebtedness and Term Loan Exchange Notes and (B) any Permitted Refinancing Indebtedness to Refinance (in whole or in part) any such Credit Agreement Refinancing Indebtedness and Term Loan Exchange Notes;
(c) Indebtedness of the Borrower to any Restricted Subsidiary and of any Restricted Subsidiary to the Borrower or any other Restricted Subsidiary; provided that (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Subsidiary Loan Party owing to the Borrower or any Subsidiary Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Restricted Subsidiary that is owing to any Loan Party shall be evidenced by the subordination terms set forth in Section 3.01 of the GuarantyIntercompany Subordinated Note;
(fd) Indebtedness of the Borrower and the Restricted Subsidiaries pursuant to Swap Agreements to the extent that, at the time entered into, such Swap Agreements were (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount ordinary course of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into business to hedge or mitigate risks to which the Parent Borrower or any Restricted Subsidiary has actual is exposed in the conduct of its business or anticipated exposure the management of its liabilities (other than those in respect of shares of capital stock including currency risks) or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceRestricted Subsidiary;
(he) Guarantee Obligations in respect of Cash Management Services and other Indebtedness in respect of netting services, automatic clearing house arrangements, employees’ credit or purchase cards, overdraft protections and similar arrangements and otherwise in connection with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiariesdeposit accounts, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries case, incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or reimbursement obligations in respect of purchase price (including earn-outs) any bankers’ acceptance, bank guarantees, letters of credit, warehouse receipt or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, facilities entered into in the ordinary course of business;
business (o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, or consistent with past practice, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance) and (ii) Indebtedness supported by Letters of Credit or other letters of credit under similar facilities in an amount not to exceed the Stated Amount of such Letters of Credit or stated amount of such other letters of credit under such similar facilities;
(pg) obligations Indebtedness in respect of performancecontracts (including trade contracts and government contracts), bidstatutory obligations, performance bonds, bid bonds, custom bonds, stay and appeal and bonds, surety bonds and bonds, indemnity bonds, judgment bonds, performance and completion guarantees and return of money bonds and guarantees, financial assurances, bankers’ acceptance facilities and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case not in connection with the ordinary course borrowing of business or consistent with past practicemoney, including those incurred to secure health, safety and environmental obligations;
(qi) Indebtedness supported of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary (or is a Restricted Subsidiary that survives a merger, consolidation or amalgamation with such Person or any of its Subsidiaries) or Indebtedness attaching to assets that are acquired by the Borrower or any Restricted Subsidiary, in each case after the Effective Date as the result of an Acquisition, Investment, similar transaction or Indebtedness of any Unrestricted Subsidiary that is redesignated as a Letter of Credit in a principal amount not to exceed the face amount of such Letter of CreditRestricted Subsidiary; provided that;
(rA) subject to Section 1.10, after giving pro forma effect thereto, no Event of Default under Section 7.01(a), (b), (h) or (i) other unsecured or junior lien Indebtedness has occurred and is continuing;
(B) as of the Parent date that any such Person becomes a Restricted Subsidiary (or is a Restricted Subsidiary that survives a merger, consolidation or amalgamation with such a Person or any of its Subsidiaries) or the date that any such assets are acquired by the Borrower or any Restricted Subsidiary in and after giving pro forma effect thereto, the aggregate principal amount of Indebtedness then outstanding pursuant to this Section 6.01(h) does not exceed, except as contemplated by the definition of “Permitted Refinancing Indebtedness”, the sum of
(I) the Incremental Base Amount plus
(II) subject to Section 1.10, an aggregate amount not such that, after giving pro forma effect to exceed (A) $1,000,000,000 the Incurrence of any such Indebtedness and to such Acquisition, Investment, similar transaction or any Specified Event to be consummated in connection therewith, the Borrower and the Restricted Subsidiaries shall be in compliance on a pro forma basis with, at the time option of the Borrower, either (1) a Consolidated Total Leverage Ratio, as such ratio is calculated as of the last day of the Test Period most recently ended on or prior to the date of such Incurrence, as if such Incurrence, Acquisition, Investment, similar transaction or any incurrence pursuant to this clause (A) (when aggregated with Specified Event had occurred on the amount first day of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) such Test Period, that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as is no greater than either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 5.50:1.00 or (y) the Consolidated Total Leverage Ratio immediately prior to such Incurrence and such other transactions or (2) a Consolidated Fixed Charge Coverage Ratio, as such ratio is calculated as of the last day of the Test Period most recently ended on or prior to the date of such Incurrence, as if such Incurrence, Acquisition, similar transaction or Specified Event occurred on the first day of such Test Period, of either (x) not less than 2.00:1.00 or (y) not less than the Consolidated Fixed Charge Coverage Ratio immediately prior to giving effect to such Incurrence and such other transactions;
(calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1C) such Indebtedness shall existed at the time such Person became a Subsidiary or at the time such assets were acquired and, in each case, was not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, created in anticipation thereof;
(2D) such Indebtedness shall is not have mandatory prepaymentguaranteed in any respect by the Borrower or any Restricted Subsidiary (other than any such Person that so becomes a Restricted Subsidiary or is the survivor of a merger with such Person or any of its Subsidiaries) (except, redemption or offer to purchase events more onerous than those applicable for the avoidance of doubt, to the Term B Loans, extent permitted by dollar for dollar usage of any other basket set forth in Section 6.01); and
(3E) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 the Equity Interests of such Person is pledged to the Administrative Agent to the extent required under Section 5.10 and Section 5.11 and (y) 25.0% such Person executes a supplement to each applicable Security Document (or alternative guarantee and security arrangements in relation to the Secured Obligations) and a counterpart signature page to the Intercompany Subordinated Note, in each case to the extent required under Section 5.10 or Section 5.11, as applicable; provided that the requirements of Consolidated EBITDA this clause (E) shall not apply to any Indebtedness of the Parent Borrower for the most recently ended Test Period at any one time outstanding and type that could have been Incurred under Section 6.01(j); and
(ii) any Permitted Refinancing thereof;
Indebtedness Incurred to Refinance (s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks whole or similar financial institutions; provided that (1in part) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriaIndebtedness;
(i) Indebtedness (in of the form of senior secured, senior unsecured, senior subordinated, Borrower or subordinated notes any Restricted Subsidiary Incurred to finance an Acquisition or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14similar Investment; provided that that,
(A) such Indebtedness shall not mature earlier than the Maturity Date applicable subject to the Term B LoansSection 1.10, after giving pro forma effect thereto, no Event of Default under Section 7.01(a), (b), (h) or (i) has occurred and is continuing;
(B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms Incurrence and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14pro forma effect thereto, and the terms set forth in use of the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) proceeds thereof, the maximum aggregate principal amount of Indebtedness that may be incurred then outstanding pursuant to this clause (v) and Section 7.03(r) 6.01(i), does not exceed, except as contemplated by Non-Loan Parties shall not exceed the greater definition of “Permitted Refinancing Indebtedness”, the sum of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (DI) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.Incremental Base Amount plus
Appears in 2 contracts
Sources: Credit Agreement (Ww International, Inc.), Credit Agreement (Ww International, Inc.)
Indebtedness. Create(a) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(ai) Indebtedness of the Parent Borrower and any of its Subsidiaries created under the Loan Documents;,
(bii) Indebtedness of the Borrowers in respect of the Existing Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;,
(ciii) Indebtedness existing on the Closing Date not to exceed $2,500,000 and other Indebtedness existing on the Closing Date set forth in Schedule 6.01 and, in each case, any Permitted Refinancing thereof,
(iiv) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or Holdings owed to any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue and of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing owed to the Parent Borrower Holdings or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02Subsidiary; provided that all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Non-Loan Party shall be subject subordinated to the subordination Obligations on terms set forth in Section 3.01 of reasonably satisfactory to the Guaranty;Administrative Agent; provided, further, that Indebtedness owed to any Captive Insurance Subsidiary shall only be subordinated to the extent permitted by applicable laws or regulations,
(fv) Guarantees by Holdings of Indebtedness of any Restricted Subsidiary and by any Restricted Subsidiary of Indebtedness of Holdings or any other Restricted Subsidiary; provided that (iA) Attributable the Indebtedness so Guaranteed is permitted by this Section 6.01, (B) Guarantees permitted under this clause (v) shall be subordinated to the Obligations of Holdings or the applicable Restricted Subsidiary to the same extent and on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations and (C) except in the case of Foreign Subsidiaries that provide Guarantees of Indebtedness of other Foreign Subsidiaries, no Restricted Subsidiary shall Guarantee any Indebtedness unless it is a Subsidiary Loan Party,
(vi) Indebtedness (including Capitalized LeasesAttributable Indebtedness) financing of Holdings or any Restricted Subsidiary incurred to finance the acquisition, construction, repair, replacement construction or improvement of any fixed or capital assets, including Capital Lease Obligations, and any Indebtedness assumed by Holdings or any Restricted Subsidiary in connection with the acquisition of any such assets (or secured by a Lien on any such assets prior to the acquisition thereof, and Permitted Refinancings thereof; provided that (A) such Indebtedness (other than Permitted Refinancings) is incurred concurrently with prior to or within two hundred seventy (270) 180 days after such acquisition or the applicable acquisition, construction, repair, replacement completion of such construction or improvement), improvement and (iiB) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an the aggregate principal amount of Indebtedness permitted by this clause (vi) shall not to (except as permitted by the definition of “Permitted Refinancing”) exceed at any one time outstanding the greater of (x) $100,000,000 87,500,000 and (y) 6.02.5% of Consolidated EBITDA Total Assets as of the Parent Borrower for time of incurrence,
(vii) (x) Indebtedness of Holdings or any Restricted Subsidiary assumed in connection with any Permitted Acquisition and not created in contemplation thereof or (y) Permitted Debt incurred to finance a Permitted Acquisition; provided that after giving Pro Forma Effect to such Permitted Acquisition and the most recently ended Test Period assumption or incurrence of such Indebtedness incurred or assumed pursuant to this clause (vii):
(A) if such Indebtedness ranks pari passu in right of security with the Obligations, the First Lien Net Leverage Ratio does not exceed 3.50:1.00,
(B) if such Indebtedness ranks junior in right of security with the Obligations, the Secured Net Leverage Ratio does not exceed 4.50:1.00, or
(C) if such Indebtedness is unsecured, the Total Net Leverage Ratio does not exceed 5.75:1.00, and in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis and, in the case of clauses (x) and (iiiy) of this clause (vii), any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)such Indebtedness; provided that any such Indebtedness of a Non-Loan Party does not exceed in the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtednessat any time outstanding, but excluding Attributable together with any Indebtedness incurred by a Non-Loan Party pursuant to clause (ii)xvi) under of this Section 7.03(f) does not exceed 6.01, the greater of (x) $350,000,000 70,000,000 and (y) 20.02.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted SubsidiariesTotal Assets, in each case to the extent permitted by Section 7.02(y)determined at such time of incurrence;
(iviii) Indebtedness representing deferred compensation owed to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price Person (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankerscredit for the benefit of such Person) providing workers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claimscompensation, health, disability or other employee benefits or property, casualty or liability insurance pursuant to reimbursement or self-insurance or other Indebtedness with respect indemnification obligations to reimbursement-type obligations regarding workers compensation claims;such Person, in each case incurred in the ordinary course of business,
(pix) obligations Indebtedness of Holdings or any Restricted Subsidiary in respect of performanceperformance bonds, bidbid bonds, appeal and bonds, surety bonds and bonds, performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretoobligations, in each case provided in the ordinary course of business or consistent with past practice;business,
(qx) Indebtedness supported of any Loan Party pursuant to Swap Agreements permitted by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;Section 6.07,
(rxi) (i) with respect to Holdings, Qualified Holdings Discount Debt; provided that, other unsecured or junior lien Indebtedness than with respect to any additional principal amounts resulting from the accrual of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed pay-in-kind interest, (A) $1,000,000,000 at such Indebtedness may only be issued or incurred to the time extent that after giving effect to the incurrence of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of such additional Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of , the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Total Net Leverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall does not exceed the greater of (x) $400,000,000 prior to March 31, 2019, 6.25 to 1.00 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding from and after March 31, 2019, 6.00 to 1.00 and (iiB) any Permitted Refinancing thereof;no Default has occurred and is continuing or would result therefrom,
(sxii) Indebtedness representing deferred compensation to employees of Holdings and the Restricted Subsidiaries incurred in the ordinary course of business,
(xiii) Indebtedness in respect of promissory notes issued to physicians, consultants, employees or directors or former employees, consultants or directors in connection with repurchases of Equity Interests permitted by Section 6.08(a)(iii),
(xiv) Indebtedness of any Foreign Subsidiary or any Non-Loan Party, collectively, in an amount not to exceed, together with any Indebtedness incurred by a Non-Loan PartyParty pursuant to clause (vii) of this Section 6.01, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 87,500,000 at any one time outstanding plus outstanding,
(Bxv) additional Indebtedness incurred from time Refinancing Debt Securities, the Net Proceeds of which are applied to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; prepay Term Loans in connection with Section 2.11 and any Permitted Refinancing thereof,
(xvi) (a) Permitted Debt, provided that (1i) (x) if such Indebtedness is secured by Liens on ranking pari passu with the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed Liens securing the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuanceFirst Lien Net Leverage Ratio does not exceed 3.50:1.00, (Ey) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on Liens ranking junior to the Collateral that is pari passu with the Lien Liens securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(iiSecured Net Leverage Ratio does not exceed 4.50:1.00, and (z) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan is unsecured, the Total Net Leverage Ratio does not exceed 5.75:1.00, in each case, determined on a Pro Forma Basis after giving effect to such assumption or incurrence and (F) the Parent Borrower has delivered to the Administrative Agent a certificate use of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) proceeds thereof; and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “any Permitted Alternative Incremental Facilities Debt”) Refinancing thereof and (ii) in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis; and (b) other Permitted Debt in an aggregate principal amount pursuant to this subclause (b), when aggregated with the Free and Clear Usage Amount at such time, not to exceed the sum of (i) $100,000,000 plus (ii) the principal amount of any voluntary prepayments of Term Loans or Revolving Loans, to the extent accompanied by a permanent reduction in the Revolving Commitments, and any Permitted Refinancing thereof;,
(uxvii) the incurrence by Holdings or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five (5) Business Days,
(xviii) the incurrence of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or capital stock of Holdings or any Restricted Subsidiary,
(xix) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business,
(xx) Indebtedness of Holdings or a Restricted Subsidiary in respect of netting services, overdraft protection and otherwise in connection with deposit accounts; provided that such Indebtedness remains outstanding for 10 Business Days or less,
(xxi) Indebtedness in the amount of Net Proceeds actually received by Holdings from the issuance by Holdings of any Equity Interests (or capital contribution in respect thereof) after the Closing Date other than pursuant to the Cure Right or to the extent Otherwise Applied, and
(xxii) the incurrence or issuance by Holdings or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 210,000,000 and (y) 30.06.0% of Consolidated EBITDA Total Assets at the time of the Parent Borrower for the most recently ended Test Period at any one time outstanding;incurrence.
(vb) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.036.01, in the event that an item of Indebtedness (or any portion thereof) at any time, whether at the time of incurrence or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (aSection 6.01(a)(i) through (zxxi) above, the Parent Borrower shallBorrower, in its sole discretion, will classify and reclassify or later divide, classify or may subsequently reclassify such item of Indebtedness (or any portion thereof) in any one or more of the types of Indebtedness described in 6.01(a)(i) through (xxi) above and will only be required to include the amount and type of such Indebtedness in one or more such of the above clausesclauses as determined by the Borrower at such time; provided that all Indebtedness outstanding under that originally reduced the Loan Documents Free and Clear Usage Amount at the time of incurrence may not be reclassified. The Borrower will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in 6.01(a)(i) through (xxi) above.
(c) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness, the dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in reliance only on the exception in clause connection with such refinancing.
(ad) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion or amortization of accreted value and OID, the payment of interest in the form of additional Indebtedness with the same terms, shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.036.01.
Appears in 2 contracts
Sources: Credit Agreement (Select Medical Corp), Credit Agreement (Select Medical Corp)
Indebtedness. CreateNeither the Borrower nor any of the Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:except (in each case, only to the extent created, incurred, assumed or suffered to existing in the ordinary course of business):
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) Indebtedness owed to the Borrower or any Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (y) all such Indebtedness of any Loan Party owed to any Person or Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder hereunder; provided that (except i) a Subsidiary that an Immaterial Subsidiary may is not a Loan Party cannot, by but virtue of this Section 7.03(d7.03(c), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)7.03 and (ii) the aggregate principal amount of Indebtedness of non-Loan Parties that is guaranteed by any Loan Party pursuant to this Section 7.03(c) shall not exceed $6,000,000 at any time outstanding; provided, further that (A) no Guarantee of any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided that, a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Subsidiary that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness owing to a Subsidiary that is not a Loan Party is subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks asset in an aggregate principal amount not to exceed $2,500,000 at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iiiii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against the Borrower’s or mitigate any Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Subsidiary has actual or anticipated exposure assumed in connection with any Permitted Acquisition so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, (other than those in respect i) the aggregate amount of shares of capital stock or other equity ownership interests of the Parent Borrower or such Indebtedness does not exceed $10,000,000 at any Subsidiary), time outstanding and (ii) entered into the Borrower and its Subsidiaries shall be in order to effectively capcompliance with the financial covenants set forth in Section 7.11, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment determined on a Pro Forma Basis as of the Parent Borrower or date of incurrence of such Indebtedness; provided that any such Indebtedness of a Subsidiary that is not a Loan Party, together with any Indebtedness of all Subsidiaries that are not Loan Parties pursuant to Sections 7.03(w) and (iii) entered into to hedge commodities7.03(v), currencies, general economic conditions, raw materials prices, revenue streams or business performancedoes not exceed $5,000,000 in the aggregate at any time outstanding;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purposes of financing such acquisition; provided, that such Indebtedness is not reflected on the balance sheet of the Borrower or any of its Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (j));
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) other Indebtedness of the ordinary courseBorrower or any of its Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed $5,000,000 at any time outstanding;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit[reserved];
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof[reserved];
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria[reserved];
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof[reserved];
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[reserved];
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisitionby all Foreign Subsidiaries which, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to Sections 7.03(g), 7.03(w) and this clause (v) then outstanding, does not exceed $5,000,000;
(w) unsecured Indebtedness of the Borrower or any Subsidiary, so long as the Borrower and its Subsidiaries are in compliance with the covenants set forth in Section 7.03(r) by Non-7.11, determined on a Pro Forma Basis as of the date of incurrence of such Indebtedness; and without duplication, Permitted Refinancings of such Indebtedness; provided that any such Indebtedness of a Subsidiary that is not a Loan Party, together with any Indebtedness of Subsidiaries that are not Loan Parties shall pursuant to Sections 7.03(g), 7.03(q) or 7.03(s), does not exceed $5,000,000 in the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period aggregate at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof[reserved]; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zy) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents and any Permitted Refinancing thereof, will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.03(a).
Appears in 2 contracts
Sources: Credit Agreement (Red Lion Hotels CORP), Credit Agreement (Red Lion Hotels CORP)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries under the Loan Documents;
(b) the Existing Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) Indebtedness existing on the date hereof (ix) Indebtedness with an individual value not in excess of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, $10,000,000 or (iiy) Surviving Indebtedness listed on Schedule 7.03(c) and in each case of the foregoing clauses (iiix) and (y), any Permitted Refinancing of any of the foregoingthereof;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, (x) if the Indebtedness being guaranteed is subordinated to the Loan Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Loan Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (y) Guarantee Obligations made by a Loan Party with respect to Indebtedness of a Non-Loan Party must be permitted pursuant to Section 7.02;
(e) Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 3.02 of the GuarantyGuaranty (but only to the extent permitted by applicable law and not giving rise to material adverse tax consequences);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed exceed, at the time of the incurrence thereof, the greater of (x) $350,000,000 140,000,000 and (y) 20.015.0% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts not for speculative purposes (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with obligations of non-wholly owned Foreign Subsidiaries that are Restricted Subsidiaries in respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, Disqualified Equity Interests in each case an amount not to the extent permitted by Section 7.02(y)exceed $15,000,000 at any time outstanding;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrowercompany) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current future, present or former directors, officers, directorsmembers of management, partners, managers, employees or consultants and employees, of the Borrower or any of its Subsidiaries or their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06(f);
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower (or any parent company) or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Transactions, Permitted Acquisitions or and/or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations, Bi-Lateral Letter of Credit Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, cash pooling arrangements, purchase card and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) Indebtedness (whether secured or unsecured) (i) in an unlimited amount, of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary) after the date hereof and/or any other unsecured or junior lien Indebtedness of the Parent Borrower otherwise assumed in connection with an acquisition or any other Investment not prohibited hereunder, to the extent in the case of this clause (i), such Indebtedness was not incurred in contemplation of such acquisition or other Investment and such Indebtedness constitutes the obligations of only such newly acquired Restricted Subsidiary Subsidiary, (ii) incurred in connection with a Permitted Acquisition or other Investment not prohibited hereunder, in an aggregate principal amount for this clause (ii), not to exceed (A) $1,000,000,000 exceed, at the time of any the incurrence pursuant to this clause thereof, (A) the Fixed Incremental Amount (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally taking into account any amounts already incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) belowthereon) plus (B) an additional unlimited additional unsecured or junior lien Indebtedness, amount so long as either after giving Pro Forma Effect thereto, the Borrower is in compliance with the Financial Covenants and (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to secured by a Lien on the date Collateral that is 91 days after pari passu with the Maturity Date of Lien on the Term B Loans or have a Weighted Average Life to Maturity less than Collateral securing the Weighted Average Life to Maturity of Obligations, the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall First Lien Leverage Ratio does not exceed the greater of (x1) $400,000,000 3.75:1.00 and (2) the First Lien Leverage Ratio at the end of the most recently ended Test Period, (y) 25.0% in the case of Consolidated EBITDA Indebtedness secured by a Lien on the Collateral that ranks junior to the Liens on the Collateral securing the Obligations, the Secured Leverage Ratio does not exceed the greater of 4.25:1.00 and the Parent Borrower for Secured Leverage Ratio at the end of the most recently ended Test Period and (z) in the case of Indebtedness that is unsecured or secured by assets that are not Collateral, the Total Leverage Ratio does not exceed the greater of 4.25:1.00 and the Total Leverage Ratio at the end of the most recently ended Test Period and (iii) incurred for any one time outstanding purpose not prohibited by this Agreement, in an aggregate principal amount for clause (iii), not to exceed an unlimited amount so long as after giving Pro Forma Effect thereto, the Borrower is in compliance with the Financial Covenants and (x) in the case of Indebtedness secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Obligations, the First Lien Leverage Ratio does not exceed 3.75:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 3.75:1.00 and the First Lien Leverage Ratio at the end of the most recently ended Test Period), (y) in the case of Indebtedness secured by a Lien on the Collateral that ranks junior to the Liens on the Collateral securing the Obligations, the Secured Leverage Ratio does not 4.25:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 4.25:1.00 and the Secured Leverage Ratio at the end of the most recently ended Test Period) and (z) in the case of Indebtedness that is unsecured or secured by assets that are not Collateral, the Total Leverage Ratio does not exceed 4.25:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 4.25:1.00 and the Total Leverage Ratio at the end of the most recently ended Test Period); provided that, such Indebtedness incurred under clauses (ii) and (iii), (1) shall be subject only to the applicable Required Debt Terms, (2) (I) any Permitted Refinancing such Indebtedness of any Subsidiaries that are non-Loan Parties under the ratios specified in clause (ii)(B) (when taken together with any Indebtedness incurred by non-Loan Parties under clause (iii) of this Section 7.03(r)) shall not exceed, at the time of the incurrence thereof, the greater of (X) $320,000,000 and (Y) 35.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period) and (II) any such Indebtedness of any Subsidiaries that are not Loan Parties under the ratios specified in clause (iii) shall not exceed (when taken together with any Indebtedness incurred by non-Loan Parties under clause (ii) of this Section 7.03(r)), at the time of the incurrence thereof, the greater of (X) $320,000,000 and (Y) 35.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period and (3) in the case of any such Indebtedness in the form of Qualifying Term Loans incurred in reliance on clauses (ii)(B)(x) or (iii)(x), shall be subject to the MFN Provisions;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by any Non-Loan Party, (x) in an aggregate principal amount not to exceed exceed, at the time of the incurrence thereof, the greater of (Ai) $600,000,000 140,000,000 and (ii) 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period and (y) under working capital lines, lines of credit or overdraft facilities (to the extent such Indebtedness are not secured by assets constituting Collateral and are non-recourse to the Loan Parties) in an aggregate principal amount not to exceed, at any one the time outstanding plus of the incurrence thereof, the greater of (Bi) $90,000,000 and (ii) 10% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(t) Incremental Equivalent Debt;
(u) additional Indebtedness incurred from in an aggregate principal amount not to exceed, at the time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; of the incurrence thereof, the greater of (x) $415,000,000 and (y) 45% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(v) Indebtedness in an aggregate principal amount not exceeding the Available Amount, provided that (1i) at the time of the incurrence of such Indebtedness made utilizing amounts specified in clause (b) of the definition of “Available Amount”, no Specified Event of Default shall have occurred and be continuing or would result therefrom and (ii) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject only to a borrowing base or similar advance rate criteriathe applicable Required Debt Terms;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans or the replacement of Revolving Credit Commitments in accordance with Section 2.05(b)(iii); provided that (A) if such Indebtedness is secured on a junior basis to such Term Loans or Revolving Credit Loans, as applicable, or is unsecured, such Indebtedness shall not mature earlier than the date that is 91 days after the Maturity Date with respect to the relevant Term Loans or Revolving Credit Loans, as applicable, being refinanced, (B) other than Inside Maturity Loans, such Indebtedness shall not mature prior to the Maturity Date of the Term Loans or Revolving Credit Loans, as applicable, being refinanced and, as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness (other than revolving loans) shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) subject to clause (h) of the “Collateral and Guarantee Requirement”, such Indebtedness is not secured by any assets not securing the Obligations unless such assets substantially concurrently secure the Obligations, (E) the terms and conditions of such Indebtedness (excluding pricing pricing, call protection, premiums and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect shall be either, taken as a whole, no more favorable to the lenders providing such Indebtedness, in their capacity as such or, solely in the case such Indebtedness is refinancing the Term Loans, be on market terms and conditions on at the time of the establishment of such Indebtedness (in each case, as reasonably determined by the Borrower) (except for (x) covenants or other provisions applicable only to periods after the latest maturity date of the relevant Loans being refinanced or (y) to the extent any more restrictive covenant or provision is added for the benefit of (A) with respect to any such Indebtedness incurred as term B loans, such covenant or provision is also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Indebtedness or (B) with respect to any revolving facility or Customary Term A Loans, such covenant or provision (except to the extent only applicable after the maturity date of the Revolving Credit Facility) is also added for the benefit of the Revolving Credit Facility to the extent it remains outstanding after the incurrence of such Indebtedness; it being understood and agreed that in each such case, no consent of the Administrative Agent and/or any Lender shall be required in connection with adding such covenant or provision), and (F) such Indebtedness shall not participate be in mandatory prepayments on a greater than pro rata basis with principal amount in excess of the amount of Term Loans or Revolving Credit Commitments, as applicable, so refinanced except by an amount equal to unpaid accrued interest and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrowerpremium thereon plus other reasonable amounts paid and unused commitments, together and fees and expenses reasonably incurred, in connection with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) such refinancing and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Qualified Securitization Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes Securities incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and;
(z) all premiums Indebtedness resulting from the guarantees and other credit support provided in connection with the Compass Sale;
(if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.aa
Appears in 2 contracts
Sources: Credit Agreement (Wyndham Destinations, Inc.), Credit Agreement (Wyndham Destinations, Inc.)
Indebtedness. CreateNone of the Covenant Parties or any of their Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments or any refinancings thereof;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of Closing Date and listed on Schedule 7.03(b) to the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Original Credit Agreement and any Permitted Refinancing thereofrefinancing thereof and, until the first Business Day following the Pushdown Date, the Outstanding Indebtedness and (ii) intercompany Indebtedness outstanding on the Closing Date evidenced by an Intercompany Note and any refinancing thereof evidenced by an Intercompany Note;
(c) (i) Indebtedness of the Parent Borrower Guarantees by any Covenant Party and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower any Covenant Party or any Restricted Subsidiary of a Covenant Party otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any Senior Subordinated Debt, Senior Unsecured Debt or Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower a Covenant Party or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, lease or improvement of a fixed or capital asset incurred by a Covenant Party or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) (i) entered into to hedge or mitigate risks to which the Parent Borrower Indebtedness of any Covenant Party or any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (v) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Debt Documentation as of the Pushdown Date, (w) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Covenant Parties and their Restricted Subsidiaries will be in Pro Forma Compliance with the covenant set forth in Section 7.11, (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the latest Maturity Date (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemption provisions satisfying the requirement of clause (y) hereof), (y) has actual or anticipated exposure terms and conditions (other than those in respect of shares of capital stock or other equity ownership interests interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Covenant Parties as the terms and conditions of the Parent Borrower Senior Subordinated Debt; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or any Subsidiary)drafts of the documentation relating thereto, stating that N▇▇▇▇▇▇ has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrowers within such five Business Day period that it disagrees with such determination (iiincluding a reasonable description of the basis upon which it disagrees) entered into in order to effectively cap, collar or exchange interest rates and (from fixed to floating rates, from one floating rate to another floating rate or otherwisez) with respect to any interest-bearing liability or investment of such Indebtedness described in the Parent Borrower or any Subsidiary and immediately preceding clause (iii) entered into to hedge commoditiesB), currencies, general economic conditions, raw materials prices, revenue streams or business performanceis incurred by a Loan Party;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (any Covenant Party or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by any Covenant Party or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (NHF or any direct or indirect parent thereof) of NHF permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent Disposition constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of any Covenant Party or any of its Restricted Subsidiaries, in an aggregate principal amount that at the ordinary coursetime of, and after giving effect to, the incurrence thereof, would not exceed $400,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness constituting the Senior Subordinated Debt and/or the Senior Unsecured Debt;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness of non-Guarantor Subsidiaries incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in the ordinary course of business on ordinary business terms in an aggregate principal amount outstanding not to exceed $75,000,000 at any time;
(t) Indebtedness of the Covenant Parties or the Restricted Subsidiaries (i) assumed in connection with any Permitted Acquisition or (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests of a Person and including, for the avoidance of doubt, the assets owned by such Person) and so long as both immediately prior and after giving effect thereto, (A) $600,000,000 at any one time outstanding plus no Default shall exist or result therefrom, (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Company and the Restricted Subsidiaries that are not Loan Parties (and not on will be in Pro Forma Compliance with the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under covenant set forth in Section 7.027.11, and (3C) borrowings under the aggregate principal amount of such asset based revolving facilities shall be subject Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (t) does not exceed $200,000,000;
(u) Indebtedness in connection with a borrowing base or similar advance rate criteriaPermitted Receivables Financing;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers pursuant to a Permitted Debt Offering to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, are applied solely to the prepayment of Term Loans in accordance with the manner set forth in Section 2.05(b)(iii)2.05; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) other Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange Offering so long as the aggregate principal amount of such Indebtedness at the time of issuance or incurrence, when taken together with the aggregate principal amount of Indebtedness issued or incurred pursuant to this Section 7.03(v)(ii) and the aggregate principal amount of Incremental Term Loans and Revolving Commitment Increases incurred pursuant to Section 2.14(a), in accordance with Section 2.17 each case, following the Fourth A&R Effective Date and prior to such date, does not exceed the Maximum Incremental Facilities Amount; and (iii) any Permitted Refinancing thereofof the foregoing;
(w) Indebtedness caused by granting the Ratable Security of EMTNs;
(x) other Indebtedness so long as at the time any such Indebtedness is issued or incurred, the Total Leverage Ratio calculated on a Pro Forma Basis is less than or equal to 6.50 to 1.00; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Nielsen CO B.V.), Credit Agreement (Nielsen Holdings N.V.)
Indebtedness. CreateNeither the Lead Borrower nor any of its Restricted Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of Guarantees by the Parent Lead Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Lead Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination arrangements with respect to such Indebtedness and (C) any Guarantee of such Indebtednessany Indebtedness of a Non-Loan Party shall only be permitted under the General Investments Basket;
(ed) Indebtedness of the Parent Lead Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting a Permitted Investment or an Investment permitted by Section 7.027.06; provided that all such Indebtedness shall be evidenced by the Global Intercompany Note (which, in the case of Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall Party, be subject unsecured and subordinated to the subordination terms set forth Obligations in Section 3.01 of a manner reasonably acceptable to the GuarantyAdministrative Agent or the Required Lenders);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Lead Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, lease, construction, repair, replacement replacement, or improvement), (ii) Attributable Indebtedness arising out improvement of Permitted Sale Leasebacks the applicable asset in an aggregate outstanding principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 35,000,000, and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) thereof and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period[reserved];
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which against the Parent Borrower Lead Borrower’s or any Subsidiary has actual or anticipated Restricted Subsidiary’s exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) to another floating rate the extent constituting Indebtedness, any Investment arising out of, or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commoditiesin connection with, currencies, general economic conditions, raw materials prices, revenue streams or business performanceExisting Cash Management Practices;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Lead Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of businessbusiness or Indebtedness in relation to any part-time worker arrangements in accordance with the German Old-Age Employees Part Time Act (Altersteilzeitgesetz) or pursuant to section 7d of book IV of the German Social Act (Sozialgesetzbuch);
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Lead Borrower or any direct or indirect parent thereof) Parent permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Lead Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment or any Disposition expressly permitted hereunder or any Dispositionhereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower , or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderarrangements;
(mk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseconnection with deposit accounts;
(nl) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(om) Indebtedness incurred by the Parent Lead Borrower or any of its Restricted Subsidiaries in respect the form of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, property casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-reimbursement type obligations regarding workers compensation claims;
(pn) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Lead Borrower or any of its Restricted Subsidiaries or obligations in respect the form of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qo) the 2029 Notes and any Permitted Refinancing thereof;
(p) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(rq) (i) other unsecured or junior lien Indebtedness to the extent constituting Indebtedness, obligations of the Parent Lead Borrower or any Restricted Subsidiary which is the seller or servicer (or any obligation of the Lead Borrower or any Restricted Subsidiary in an aggregate amount not to exceed respect of a seller or servicer) in a Permitted Securitization;
(Ar) $1,000,000,000 at Guarantees of the time of any incurrence pursuant to this clause Super HoldCo Obligations provided by the Super HoldCo Foreign Guarantors;
(As) (Indebtedness which, when aggregated with the principal amount of Permitted Refinancings in respect of all other Indebtedness originally incurred pursuant to this clause (s) and then outstanding, does not exceed $20,000,000, and any Permitted Refinancing thereof;
(t) [reserved];
(i) any joint and several liability arising as a result of (the establishment of) a fiscal unity (fiscale eenheid) between Restricted Subsidiaries incorporated in The Netherlands; and (ii) a guarantee granted pursuant to a declaration of joint and several liability use for the purpose of Section 2:403 of the Dutch Civil Code (and any residual liability under such declaration arising pursuant to Section 2:404(2) of the Dutch Civil Code) in respect of Restricted Subsidiaries;
(v) Indebtedness which, when aggregated with the principal amount of all other Indebtedness outstanding pursuant to this clause (v), does not exceed $250,000,000, and any Permitted Refinancing thereof; provided that such Indebtedness (A) that are consummated matures after the latest Maturity Date in reliance on Section 7.03(r)(ii) below) plus effect at the time of the incurrence of such Indebtedness, (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have has a Weighted Average Life to Maturity less equal to or greater than the Weighted Average Life to Maturity of the Term B Loans plus 91 daysObligations, (2C) such Indebtedness shall is not have mandatory prepaymentincurred or guaranteed by a non-Loan Party Subsidiary, redemption or offer to purchase events more onerous than those applicable (D) is junior to the Term B LoansObligations in right of payment and, if applicable, security, and is subject to a Second Lien Intercreditor Agreement, (3E) is on terms no more favorable to the other terms and conditions lenders of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at than those contained in the time of incurrence or issuance of such Indebtedness Loan Documents and (4F) if secured, is secured by assets that constitute Collateral (the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to permitted under this clause (rv), “Permitted General Junior Debt”); provided that any incurrence of Permitted General Junior Debt under this clause (v) and shall reduce availability under Section 7.03(v7.03(w)(ii) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower on a dollar for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereofdollar basis;
(sw) Indebtedness incurred by a Non-Loan Partythe Junior Existing Credit Agreement, and guarantees thereof by Non-Loan Partysubject to the Superpriority Intercreditor Agreement, in an aggregate principal amount not to exceed the sum of (Ai) $600,000,000 at any one time outstanding 2,193,299,479.69 plus (Bii) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions$250,000,000; provided that (1) such any incurrence of Indebtedness is secured by Liens on under the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred Junior Existing Credit Agreement in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(ushall reduce availability under Section 7.03(w) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and dollar for dollar basis plus (iii) the maximum aggregate principal an amount of Indebtedness that may be incurred pursuant equal to this clause unpaid accrued interest and premiums thereon (v) and Section 7.03(r) by Nonincluding interest paid-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of thenin-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Akind), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) unsecured Indebtedness in respect of obligations of the Lead Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with respect to any Permitted Receivables Financingsuch goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money;
(y) Indebtedness arising out of, or in respect of Permitted Debt Exchange Notes incurred connection with, the Cash Management Practices, provided that such Indebtedness owed by Loan Parties to Restricted Subsidiaries that are not Loan Parties shall be subordinated to the Obligations pursuant to a Permitted Debt Exchange Subordination Agreement and related documentation in accordance with Section 2.17 form and any Permitted Refinancing thereofsubstance reasonably satisfactory to the Administrative Agent; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness (or any portion thereof) at any time, whether at the time of incurrence or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (aSection 7.03(a) through (zy) above, the Parent Borrower shallLead Borrower, in its sole discretion, will classify and reclassify or later divide, classify or may subsequently reclassify such item of Indebtedness (or any portion thereof) in any one or more of the types of Indebtedness described in Section 7.03(a) through (y) and will only be required to include the amount and type of such Indebtedness in one or more such of the above clausesclauses as determined by the Lead Borrower at such time. The Lead Borrower will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in Section 7.03(a) through (y) so long as such Indebtedness (or any portion thereof) is permitted to be incurred pursuant to such provision at the time of reclassification. Notwithstanding the foregoing, Indebtedness incurred (a) under the Loan Documents, any Incremental Commitments, any Incremental Loans, any Refinancing Commitments and any Refinancing Loans shall only be classified as incurred under Section 7.03(a), (b) under the Junior Existing Credit Agreement and any Permitted Refinancing thereof shall only be classified as incurred under Section 7.03(w) and (c) under the 2029 Notes and any Permitted Refinancing thereof shall only be classified as incurred under Section 7.03(o). For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that all if such Indebtedness outstanding under is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the Loan Documents will applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Lead Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (Trinseo PLC), Credit Agreement (Trinseo PLC)
Indebtedness. CreateNone of the Borrower and the Restricted Subsidiaries shall directly or indirectly create, incur, assume or suffer to exist any Indebtedness, except:
(a) (i)(A) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments and Secured Loan Document Hedge Obligations and (B) Indebtedness constituting SDB Revolving Obligations, the revolving commitments in respect of which shall not exceed an aggregate outstanding principal amount of $100,000,000 at any time, and (ii) Term Obligations the loans in respect of which shall not exceed an aggregate outstanding principal amount at any time of the sum of (A) $1,725,000,000 plus (B) the Permitted Incremental Availability Amount; provided that Term Obligations shall (x) be subject to the Collateral Agency and Intercreditor Agreement, (y) not be incurred by a non-Loan Party or guaranteed by a Person that is not a Guarantor unless such Person also guarantees the Obligations and (z) not be secured by assets that do not constitute Collateral;
(bi) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (Third Amendment Effective Date and Guarantees thereof by the Guarantorslisted on Schedule 7.3(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Third Amendment Effective Date and any refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (i) no Guarantee of any Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (ii) if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.027.2; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of (x) $70,000,000 and (y) 35% of LTM Consolidated EBITDA (after giving effect to any concurrent Investments), construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period sale-leaseback transactions permitted by Section 7.5(l), and (iii) any Permitted Refinancing of any of the foregoing;
(f) Indebtedness set forth in respect of Hedging Transactions designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or other commodity pricing risks incurred in the immediately preceding clauses ordinary course of business and not for speculative purposes;
(ig) Indebtedness of the Borrower or any Restricted Subsidiary that is a Loan Party incurred or assumed in connection with any Permitted Acquisition, and (ii)any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the incurrence or assumption of such Indebtedness, the aggregate principal amount of such Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) at any time outstanding does not exceed the greater of (xi) $350,000,000 70,000,000 and (yii) 20.035% of LTM Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
EBITDA; provided, further, that any Indebtedness incurred (but not assumed) pursuant to this clause (g) Indebtedness shall be subject to the requirements included in respect the first proviso under the definition of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance“Permitted Ratio Debt”;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors, partners, managers, consultants and employees, their respective estates, spouses spouses, or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.6;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other connection with an Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment Investments expressly permitted hereunder;
(ml) Cash Management Obligations cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of (i) $95,000,000 and (ii) 45% of LTM Consolidated EBITDA at such time (after giving effect to any concurrent Investments), together with any Permitted Refinancing thereof;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability disability, or other employee benefits or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within thirty (30) days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal appeal, and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit the Borrower and/or any Subsidiary Guarantor in respect of one or more series of senior secured loans or notes (whether issued in a principal amount not to exceed public offering, under Rule 144A of the face amount Securities Act or in another private placement or otherwise) (and including any bridge financings in lieu of such Letter notes), junior secured or unsecured “mezzanine” loans or notes or senior unsecured or subordinated loans or notes, in each case, pursuant to an indenture, interim agreement, loan agreement, syndicated credit agreement, note purchase agreement or otherwise and any extensions, renewals, refinancings and replacements thereof, including in the case of Credit;
any such notes, any Registered Equivalent Notes (r) the “Incremental Equivalent Debt”); provided that (i) other unsecured any such Incremental Equivalent Debt that is secured shall not be secured by any property or junior lien Indebtedness assets of Holdings, the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed other than the Collateral securing the Obligations, (Aii) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause Incremental Equivalent Debt secured on a pari passu basis with the Loans (r“Incremental Equivalent First Lien Debt”), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 days(without giving effect to any prior payments that would otherwise modify such Weighted Average Life to Maturity) and, in the case of Incremental Equivalent Debt that is secured on a junior lien basis with the Loans or is unsecured (“Incremental Equivalent Junior Lien Debt”), shall not be subject to scheduled amortization prior to maturity; provided that the foregoing requirements of this clause (ii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the Third Amendment Effective Date) or any facility in respect thereof, (2iii) such Indebtedness shall not in the case of Incremental Equivalent First Lien Debt, have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to a maturity date that is after the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions Revolving Commitment Termination Date at the time of incurrence or issuance of such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least ninety-one (491) days after the Latest Maturity Date (as defined in the Term Credit Agreement as of the Third Amendment Effective Date) at the time such Indebtedness is incurred; provided that the foregoing requirements of this clause (iii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the Third Amendment Effective Date) or any facility in respect thereof, (iv) the maximum aggregate outstanding principal amount of all Incremental Equivalent Debt incurred in accordance with this Section 7.3(q), together with the aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties all Incremental Commitments shall not exceed the greater of Permitted Incremental Availability Amount, (xv) $400,000,000 and the security agreements, if applicable, relating to such Indebtedness are substantially the same as the Collateral Documents (y) 25.0% of Consolidated EBITDA of with such differences as are reasonably satisfactory to the Parent Borrower for the most recently ended Test Period at any one time outstanding and Administrative Agent), (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1vi) such Indebtedness is secured not guaranteed by Liens on any Person other than the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral)Guarantors, (2vii) Loan Parties shall not Guarantee if such Incremental Equivalent Debt is secured, the Other Debt Representative acting on behalf of the holders of such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02shall have become party to the Collateral Agency and Intercreditor Agreement and/or Junior Lien Intercreditor Agreement, and as applicable, (3viii) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the case of Incremental Equivalent First Lien Debt in the form of senior securedterm loans, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers be subject to the extent that MFN Protection (as defined in the Borrowers shall have been permitted to incur Term Credit Agreement on the date hereof) as if such Indebtedness pursuant towere Permitted Incremental Term Loans, (ix) after giving effect to incurrence of Incremental Equivalent Debt, no Event of Default shall exist and be continuing or would immediately result from incurrence of such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14Incremental Equivalent Debt or from the application of the proceeds therefrom; provided that if the proceeds of such Incremental Equivalent Debt are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption, there shall be no requirement to satisfy any or all conditions set forth in this clause (Aix) such Indebtedness shall not mature earlier than except that the Maturity Date applicable requirement that no Event of Default under Section 8.1(a), (b), (g) or (i) with respect to the Term B Loans, (B) as of the date of Borrower shall have occurred and be continuing or would exist after giving effect to the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness Incremental Equivalent Debt shall not be shorter than that omitted or waived without the consent of the Term B LoansRequired Lenders, (Cx) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms except as otherwise set forth in the proviso to this Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A7.3(q), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness Incremental Equivalent Debt shall be customary as of the date of incurrence of such Incremental Equivalent Debt and (excluding pricing xi) subject to clauses (ii), (iii) and (viii) above, the amortization, pricing, rate floors, discounts, fees, premiums, and optional prepayment or redemption terms or covenants or other and redemptions provisions applicable only to periods after such Incremental Equivalent Debt shall be determined by the maturity date Borrower and the holders of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerIncremental Equivalent Debt, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Revolving Credit Agreement (WaterBridge Infrastructure LLC), Revolving Credit Agreement (WaterBridge Infrastructure LLC)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its the Restricted Subsidiaries under the Loan Documents;
(i) Indebtedness existing on the Specified Date; provided that any Indebtedness (other than Indebtedness refinanced on the Closing Date in connection with the Transactions) that is in excess of (x) $5,000,000 individually or (y) $10,000,000 in the aggregate (when taken together with all other Indebtedness outstanding in reliance on this clause (b) that is not set forth on Schedule 7.03(b)) shall only be permitted under this clause (b) to the extent that such Indebtedness of is set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Closing Date hereof and any Permitted Refinancing thereof; provided that all such Indebtedness (other than the Parent Borrower Obligor Cash Management Note) of any Loan Party owed to any Person that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Administrative Agent;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and or any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d7.03(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guaranty of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation Guaranty shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness; provided that, in any event, any Guaranty of the New Senior Notes or Permitted Additional Notes shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the New Senior Notes Indenture on the Closing Date;
(ed) Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party (other than the Parent Borrower Obligor Cash Management Note) shall be subject unsecured and subordinated to the subordination terms set forth in Section 3.01 of Obligations pursuant to an intercompany note reasonably satisfactory to the GuarantyAdministrative Agent;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period sale-leaseback transactions, and (iii) any Permitted Refinancing of any Indebtedness set forth arising under Capitalized Leases other than those in effect on the immediately preceding clauses Specified Date or entered into pursuant to subclauses (i) and (ii) of this clause (e) and, in the case of clauses (i), (ii) and (iii), any Permitted Refinancing thereof; provided that the not more than $150,000,000 in aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause this paragraph (ii)e) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodshall be outstanding at any time;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange against interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwisecommodities pricing risks and not for speculative purposes and Guarantees thereof;
(g) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;[Reserved]
(h) Guarantee Obligations Indebtedness assumed in connection with respect toany Permitted Acquisition: provided that such Indebtedness is not incurred in contemplation of such acquisition, or the assumption of, Indebtedness and any Permitted Refinancing of Franchisees, suppliers, distributors or licensees any of the Parent Borrower foregoing and its Restricted Subsidiariesso long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (h) does not exceed $250,000,000, in each case to determined at the extent permitted by Section 7.02(y)time of incurrence;
(i) [Reserved];
(j) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jk) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses Controlled Investment Affiliates or former spouses Immediate Family Members to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments7.06;
(l) Indebtedness consisting arising from agreements of obligations the Parent Borrower or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business or assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that such Indebtedness is not reflected on the balance sheet (other than by application of FASB Interpretation No. 45 as a result of an amendment to an obligation in existence on the Closing Date) of the Parent Borrower or any Restricted Subsidiary (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderthis clause (l));
(m) [Reserved];
(n) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(no) Indebtedness in an aggregate principal amount at any time outstanding not to exceed $1,000,000,000;
(p) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(oq) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pr) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qs) Indebtedness supported of CCOH and its Restricted Subsidiaries, the proceeds of which are solely used to refinance the CCU Term Note, provided that the Net Cash Proceeds from such repayment is applied to prepay the CF Facilities to the extent required by a Letter of the CF Credit Agreement.
(t) Indebtedness under the CF Facilities and any Permitted Refinancing thereof in a an aggregate principal amount not to exceed the face aggregate principal amount of such Letter of Creditcommitment under the CF Facilities on the Closing date plus any Incremental Loans (as defined under the CF Facilities);
(r) (i) other unsecured or junior lien Indebtedness and Guarantees by Guarantors in respect of the Parent Borrower or any Restricted Subsidiary New Senior Notes in an aggregate principal amount not to exceed (A) $1,000,000,000 at 2,310,000,000 plus the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding PIK Interest Amount and (ii) any Permitted Refinancing thereof;
(sv) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria[Reserved];
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (u) above and (x) through (aa) below;
(x) Guarantees incurred in the ordinary course of business in respect of obligations not constituting Indebtedness to suppliers, customers, franchisees, lessors and licensees;
(y) aboveIndebtedness incurred in the ordinary course of business in respect of obligations of the Parent Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services;
(z) Indebtedness in respect of (i) Permitted Additional Notes provided the Net Cash Proceeds therefrom are immediately after the receipt thereof, used to prepay the CF Facilities to the extent required by the CF Credit Agreement and (ii) any Permitted Refinancing of the foregoing;
(aa) Indebtedness supported by a Letter of Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(bb) Indebtedness consisting of obligations of the Parent Borrower and its Restricted Subsidiaries under deferred compensation to employees or other similar arrangements incurred by such Person in connection with the Transactions, any Permitted Acquisition or any other Investment expressly permitted hereunder;
(cc) Indebtedness incurred by a Securitization Entity in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to Holdings or any of its Subsidiaries or the Parent Borrower or any of its Subsidiaries (other than another Securitization Entity); and
(dd) Indebtedness of any Non-Loan Party that is a Restricted Subsidiary in an amount not to exceed $400,000,000 at any one time outstanding. Notwithstanding the foregoing, no Restricted Subsidiary that is not a Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Subsidiary Guarantor. In addition, notwithstanding the foregoing, (i) Restricted Subsidiaries that are not Loan Parties may not incur Indebtedness pursuant to, without duplication, the first paragraph of this Section and clauses (g), (h) and (o) of this Section in an aggregate combined principal amount at any time outstanding in excess of $500,000,000 in each case determined at the time of incurrence and (ii) until the Existing Notes Condition shall have been satisfied, (A) the Parent Borrower shall not, and shall not permit any Restricted Subsidiary to, create, incur, assume or suffer to exist any Guarantee of the Existing Notes and (B) all Indebtedness owed to the Parent Borrower by any Subsidiary Guarantor (other than the Parent Borrower Obligor Cash Management Note) shall be unsecured and subordinated to the Obligations pursuant to an intercompany note reasonably satisfactory to the Administrative Agent. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums and other costs and expenses incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Parent Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (CC Media Holdings Inc), Credit Agreement (C C Media Holdings Inc)
Indebtedness. CreateNo Credit Party shall, and no Credit Party shall suffer or permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries under the Loan Documents (including pursuant to any amendment in respect connection with an Incremental Facility, any Extension or Extension Offer, any Permitted Repricing Amendment or any other amendment entered into from time to time in accordance with the terms hereof);
(b) [Reserved];
(c) Indebtedness outstanding as of the Closing Date (provided, that, any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed in excess of $20,000,000 individually shall only be permitted to the extent such Indebtedness is set forth on Schedule 7.03(c5.3(c)) and (iii) any Permitted Refinancing of any of the foregoingthereof;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d5.3(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.035.3); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.025.2; provided that all such Indebtedness of any Loan Credit Party owed to any Person that is not a Loan Credit Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyreasonably acceptable to Agent;
(f) (i) Attributable Indebtedness Capital Lease Obligations and other Indebtedness (including Capitalized Capital Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two one hundred seventy and eighty (270180) days after the applicable acquisition, construction, repair, replacement or improvement), and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses clause (i) and (ii); and provided further that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)Capital Lease Obligations) under this Section 7.03(f5.3(f) does not exceed the greater of (xA) $350,000,000 70,000,000 and (yB) 20.013.5% of Consolidated LTM EBITDA of the Parent Borrower for the most recently ended Test Periodat any time outstanding;
(g) Indebtedness in respect of Swap Rate Contracts (i) entered into designed to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange against interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancecommodities pricing risks incurred not for speculative purposes;
(h) Guarantee Obligations Indebtedness assumed in connection with respect to, any Permitted Acquisition or Investment permitted under Section 5.2; provided that (i) such Indebtedness was not incurred in contemplation of such Permitted Acquisition or Investment and (ii) the assumption of, aggregate amount of such assumed Indebtedness does not exceed the greater of Franchisees, suppliers, distributors or licensees (A) $70,000,000 and (B) 13.5% of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)LTM EBITDA at any time outstanding;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course Ordinary Course of businessBusiness or approved by the board of directors or managers or sole member, as applicable, of the Borrower in their reasonable business judgment;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests Stock or Stock Equivalents of Holdings (or any direct or indirect parent thereof) the Borrower permitted by Section 7.06 5.6 in an aggregate principal amount not to exceed the greater of (i) $20,000,000 25,000,000 and (ii) 5.0% of LTM EBITDA at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting (i) indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsadjustments or (ii) earn-out obligations, in the case of clause (ii), not in excess of an aggregate principal amount of the greater of (A) $50,000,000 and (B) 10.0% of LTM EBITDA at any time outstanding; provided, that, in each case, all such Indebtedness shall be secured only to the extent permitted by Section 5.1 and payable only to the extent permitted by Section 5.8(b);
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course Ordinary Course of businessBusiness;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course Ordinary Course of businessBusiness, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course Ordinary Course of business or consistent with past practiceBusiness;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Junior Indebtedness of incurred by the Parent Borrower or any of its Restricted Subsidiary Subsidiaries (including in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated connection with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Acquisitions and other similar Investments permitted under Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness5.2), so long as either (x1) on the Total Leverage Ratio date of incurrence of such Indebtedness, the Borrower shall be in compliance with the Financial Covenant (calculated on a Pro Forma Basis) as of the end of the most recent recently ended Test Period Period; provided that such Indebtedness may be incurred to finance an Acquisition notwithstanding the failure to comply with the applicable ratios if such Acquisition is not greater than 7.00:1.00 or (y) a Limited Condition Transaction and the Fixed Charge Coverage Ratio (calculated Borrower was in compliance with such ratios on a Pro Forma Basis) for Basis on the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)date that a legally binding commitment was entered into with respect to such Acquisition, (12) the final maturity date of such Indebtedness shall not mature prior to be no earlier (but may be later) than the date that is 91 ninety-one (91) days after the Maturity Date final maturity date of the then outstanding Term B Loans or and shall have a Weighted Average Life to Maturity less equal to or greater than the Weighted Average Life to Maturity of the Term B Loans Loans, plus 91 ninety-one (91) days, (23) to the extent such Junior Indebtedness is secured, such Indebtedness shall not be secured by any collateral other than the Collateral and shall be subject to customary intercreditor terms to be reasonably satisfactory to Agent and the Borrower, (4) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, guaranteed by any Person that is not a Guarantor and (35) the other terms and conditions of any such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by a Non-Loan Parties Credit Party, when taken together with any Indebtedness incurred pursuant to Section 5.3(s), shall not exceed an aggregate principal amount not to exceed the greater of (xA) $400,000,000 80,000,000 and (yB) 25.015% of Consolidated LTM EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Credit Party, and guarantees thereof by a Non-Loan Credit Party, in an aggregate principal amount not to exceed exceed, when taken together with Indebtedness incurred by a Non-Credit Party pursuant to Section 5.3(r) above, the greater of (Ai) $600,000,000 70,000,000 and (ii) 13.5% of LTM EBITDA at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriaoutstanding;
(it) Incremental Equivalent Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred and Guarantees thereof by the Borrowers Guarantors) to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, by and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu compliance with the Lien securing the Obligations, the terms set forth in the proviso to applicable provisions of Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A1.1(e), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (xi) $500,000,000 100,000,000 and (yii) 30.020.0% of Consolidated LTM EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (x);
(w) any Indebtedness constituting an Investment permitted under Section 5.2;
(x) obligations in respect of Disqualified Stock in an amount not to exceed the greater of (i) $6,000,000 and (ii) 1.0% of LTM EBITDA at any time outstanding which is subordinated to the Obligations as to right and time of payment and as to other rights and remedies thereunder and having such other terms as are, in each case, reasonably satisfactory to Agent; and
(y) aboveIndebtedness in connection with a judgment not constituting an Event of Default under Section 7.1(h). For purposes of determining compliance with this Section 7.03any restriction on the incurrence of Indebtedness, the principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03defeased. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.035.3.
Appears in 2 contracts
Sources: Credit Agreement (R1 RCM Inc. /DE), Credit Agreement (R1 RCM Inc. /DE)
Indebtedness. CreateNeither the Lead Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in Closing Date and with respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) to any such Indebtedness in an aggregate principal amount not to exceed in excess of $2,250,000,000 5,000,000, listed on Schedule 7.03(b) and any Permitted Refinancing thereofthereof and (ii) Indebtedness owed to the Lead Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Lead Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or consistent with past practice or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) (i) Indebtedness of Guarantees by the Parent Lead Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Lead Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee in an Agreed Security Jurisdiction (other than Guarantees by any Restricted Subsidiary that is not a Loan Party of Indebtedness of another Restricted Subsidiary that is not a Loan Party) of any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Lead Borrower or any Restricted Subsidiary owing to the Parent Lead Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all (x) any such Indebtedness of advanced by any Loan Party owed to any Person that is not a Loan Party shall either (i) be subject made in the ordinary course of business or consistent with past practice or (ii) be evidenced by an Intercompany Note and (y) any such Indebtedness advanced by any Person that is not a Loan Party to any Loan Party shall be subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing by a Loan Party to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provided otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Financing Leases) financing an acquisition, construction, repair, replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of a fixed or capital asset incurred by the Lead Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of fixed or capital assets the applicable asset in an aggregate amount not to exceed (provided that A) the amount of such Indebtedness is incurred concurrently outstanding on the Closing Date plus (B) the greater of (1) $50,000,000 and (2) 35% of LTM Consolidated EBITDA, in each case determined at the time of incurrence at any time outstanding (together with or within two hundred seventy any Permitted Refinancings thereof but without giving effect to any increase in principal amount permitted under clause (270a) days after of the applicable acquisition, construction, repair, replacement or improvementproviso to the definition of “Permitted Refinancing”), (ii) Attributable Indebtedness arising out of Permitted any Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period Lease-Back Transaction or lease lease-back transactions permitted by Section 7.05 and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Lead Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition or similar Investment expressly permitted hereunder; provided that after giving pro forma effect to such Permitted Acquisition or Investment and the incurrence or assumption of such Indebtedness, the aggregate principal amount of such Indebtedness does not exceed (x) the greater of (1) $50,000,000 and (2) 35% of LTM Consolidated EBITDA at any time outstanding plus (y) any additional amount of such Indebtedness so long (A) if such incurred Indebtedness is secured by the Collateral on a pari passu basis with the Facilities, either (1) the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated First Lien Net Leverage Ratio immediately prior thereto or (2) the Borrowers could incur $1.00 of Permitted First Lien Ratio Debt, (B) if such Indebtedness is secured by the Collateral on a junior lien basis to the Facilities, either (1) the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Secured Net Leverage Ratio immediately prior thereto or (2) the Borrowers could incur $1.00 of Permitted Junior Secured Ratio Debt or (C) if such Indebtedness is unsecured or not secured by all or any portion of the Collateral (and including all such Indebtedness of Restricted Subsidiaries that are not Loan Parties), either (1) either (I) the Consolidated Interest Coverage Ratio determined on a Pro Forma Basis would be greater than or equal to the Consolidated Interest Coverage Ratio immediately prior thereto or (II) the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Total Net Leverage Ratio immediately prior thereto or (2) the Borrowers could incur $1.00 of Permitted Unsecured Ratio Debt; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding the greater of (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), $50,000,000 and (ii) entered into 35% of LTM Consolidated EBITDA, in order each case determined at the time of incurrence; provided, further, that any Indebtedness incurred (but not assumed) pursuant to effectively cap, collar or exchange interest rates this clause (from fixed g) shall be subject to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment the requirements included in the first proviso under the definition of the Parent Borrower or any Subsidiary “Permitted Ratio Debt,” and (iiiii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceany Permitted Refinancing thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation or similar arrangements to employees any future, present or former employees, directors, officers, managers, members, partners, independent contractors or consultants of the Parent a Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of businessbusiness or consistent with past practice;
(ji) Indebtedness consisting of promissory notes issued by the Lead Borrower or any of the Restricted Subsidiaries to current future, present or former officers, directors, partners, managers, consultants members, independent contractors, consultants, directors and employees, their respective estatesControlled Investment Affiliates or Immediate Family Members, spouses or former spouses in each case, to finance the purchase or redemption of Equity Interests of Holdings (the Borrowers or any direct or indirect parent thereof) of the Borrowers permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Lead Borrower or any of its Restricted Subsidiaries prior to the Closing Date or thereafter in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Lead Borrower or any of its Restricted Subsidiaries under deferred compensation purchase price, earn-outs or other similar arrangements incurred by such Person prior to the Closing Date or thereafter in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseLead Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of (i) $65,000,000 and (ii) 40% of LTM Consolidated EBITDA at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Lead Borrower or any of its Subsidiaries) of the Lead Borrower or any direct or indirect parent of the Lead Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Lead Borrower that has been Not Otherwise Applied;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of businessbusiness or consistent with past practice;
(o) Indebtedness incurred by the Parent Lead Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created created, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, bid, appeal indemnity, appeal, judgment and surety other similar bonds or instruments and performance performance, bankers’ acceptance and completion guarantees and similar obligations provided by the Parent Lead Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q1) Indebtedness supported incurred (x) and secured by the Collateral on a Letter of Credit in pari passu basis with the Facilities (“Incremental Equivalent First Lien Debt”) or (y) and secured by the Collateral on a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of basis with the Parent Borrower or Facilities and any Restricted Subsidiary Permitted Refinancing thereof (“Incremental Equivalent Junior Lien Debt”), in an aggregate principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to under this clause (A) (q), when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally Incremental Term Loans and Incremental Revolving Credit Commitments incurred pursuant to Section 2.14(d)(v) and Incremental Equivalent Unsecured Debt incurred pursuant to Section 7.03(w), not to exceed the Available Incremental Amount, so long as (x) if the proceeds of such Indebtedness are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption of any Indebtedness, no Event of Default under Sections 8.01(a) or (f) with respect to any Borrower shall have occurred and be continuing or would exist after giving effect to such Indebtedness, or (y) if otherwise, no Event of Default shall have occurred and be continuing or would exist after giving effect to such Indebtedness; provided that such Indebtedness shall (A) in the case of Incremental Equivalent First Lien Debt, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred (and in each case subject to the Permitted Earlier Maturity Indebtedness Exception); provided that the foregoing requirements of this clause (A) that are consummated in reliance on Section 7.03(r)(iishall not apply to the extent such Indebtedness constitutes (i) below) plus (B) unlimited additional unsecured or junior lien Indebtednessa customary bridge facility, so long as either the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of this clause (xA) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period and such conversion or exchange is not greater than 7.00:1.00 subject only to conditions customary for similar conversions or exchanges or (yii) term loan A facilities (as determined by the Fixed Charge Coverage Ratio Lead Borrower in good faith), (calculated on a Pro Forma BasisB) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)Incremental Equivalent First Lien Debt, (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysFacilities and, (2) such Indebtedness in the case of Incremental Equivalent Junior Lien Debt, shall not have mandatory prepayment, redemption or offer be subject to purchase events more onerous than those applicable scheduled amortization prior to maturity (and in each case subject to the Term B Loans, (3) Permitted Earlier Maturity Indebtedness Exception); provided that the other terms and conditions foregoing requirements of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (rB) shall not apply to the extent such Indebtedness constitutes (i) a customary bridge facility, so long as the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of this clause (B) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower such conversion or exchange is subject only to conditions customary for the most recently ended Test Period at any one time outstanding and similar conversions or exchanges or (ii) any Permitted Refinancing thereof;
term loan A facilities (s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred as determined by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred Lead Borrower in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (Bgood faith), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured on a junior lien basis by a Loan Party with respect to Collateral, be subject to a Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on the Collateral that is a pari passu basis with the Facilities, be subject to a First Lien securing the ObligationsIntercreditor Agreement, (AD) after giving Pro Forma Effect in the case of Incremental Equivalent First Lien Debt in the form of term loans of the applicable currency (other than customary bridge loans or term loan A facilities as determined by the Lead Borrower in good faith), be subject to the MFN Protection (but subject to the MFN Trigger Amount and MFN Maturity Limitation exceptions to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma BasisMFN Protection) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered were an Incremental Term Loan (of such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) currency and (iiiE) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause have terms and conditions (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of other than (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior securedpricing, senior unsecuredrate floors, senior subordinateddiscounts, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom arefees, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing premiums and optional prepayment or redemption terms or provisions and (y) covenants or other provisions applicable only to periods after the maturity date Latest Maturity Date at the time of incurrence of such Indebtedness and to the extent any terms or conditions that are more restrictive than the applicable Facilities are added for the benefit of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, to the extent that such terms or conditions are also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, as applicable) that (i) in the good faith determination of the Term Loans being refinancedLead Borrower are not materially less favorable (when taken as a whole) to the Borrowers than the terms and conditions of the Loan Documents (when taken as a whole) or reflect market terms and conditions on (taken as a whole) at the date time of incurrence or issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent provided that a certificate of a Responsible Officer the Lead Borrower as to the satisfaction of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations conditions described in clauses this clause (ai) through delivered at least five (y5) above. For purposes of determining compliance with this Section 7.03, in Business Days prior to the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type incurrence of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.I
Appears in 2 contracts
Sources: Credit Agreement (Bumble Inc.), Credit Agreement (Bumble Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness outstanding on the First Amendment Effective Date and listed in Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) intercompany Indebtedness among the Borrower and any Subsidiary of the Borrowers in respect of Borrower outstanding on the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Closing Date and any Permitted Refinancing thereof; provided that all such Indebtedness of the Borrower or any Subsidiary Guarantor owed to any Non-Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any Subsidiary of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee by any Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation, Incremental Equivalent Debt or Permitted Ratio Debt shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (C) if such Guaranty is by the Borrower or any Subsidiary Guarantor in respect of Indebtedness of a Subsidiary that is not a Subsidiary Guarantor, such Guaranty shall constitute a Restricted Investment permitted by Section 7.06 or a Permitted Investment (other than under clause (1) of the definition of “Permitted Investments”);
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower owing to the Parent Borrower or any other Restricted Subsidiary of the Borrower or issued or transferred to any direct or indirect parent of the Borrower which is substantially contemporaneously transferred the Borrower or any Subsidiary of the Borrower to the extent constituting an a Restricted Investment permitted by Section 7.027.06 or a Permitted Investment; provided that all such Indebtedness of the Borrower or any Loan Party Subsidiary Guarantor owed to any Person that is not a Non-Loan Party shall be subject unsecured and subordinated to the subordination terms set forth in Section 3.01 of Obligations pursuant to the GuarantyIntercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Subsidiary of the Borrower prior to or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement replacement, lease or improvement)improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $20,000,000 and 20.0% of Consolidated EBITDA, in each case determined at the time of incurrence at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted any Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 Leaseback Transaction and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of such Attributable Indebtedness;
(f) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Indebtedness set forth of its Subsidiaries’ exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the immediately preceding ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Subsidiary of the Borrower (i) assumed (including Acquired Indebtedness) in connection with any Permitted Acquisition or (ii) incurred to finance a Permitted Acquisition and, in the case of clauses (i) and (ii); provided that , any Permitted Refinancing of any such Indebtedness, in each case, not exceed in the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed at any time outstanding the greater of (x) $350,000,000 20,000,000 and (y) 20.0% of Consolidated EBITDA determined at the time of incurrence; provided that after giving Pro Forma Effect to such Permitted Acquisition and the Parent Borrower for the most recently ended Test Period;
assumption or incurrence of such Indebtedness incurred or assumed pursuant to this clause (g), the Consolidated Total Net Rent Adjusted Leverage Ratio does not exceed 5.25:1.00. provided that (1) any such Indebtedness in respect incurred (but not assumed) does not mature or have scheduled amortization or payments of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure principal (other than those in respect customary “AHYDO catch-up payments”, customary offers to repurchase and prepayment events upon a change of shares control, asset sale or event of capital stock or other equity ownership interests loss and a customary acceleration right after an event of default) prior to the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of date that is 91 days following the Parent Borrower or any Subsidiary then Latest Maturity Date at the time such Indebtedness is incurred and (iii2) entered into to hedge commoditiesall such Indebtedness incurred by Non-Loan Parties, currenciestogether with all Permitted Ratio Debt incurred by Non-Loan Parties, general economic conditionsdoes not exceed in the aggregate at any time outstanding the greater of $25,000,000 and 25.0% of Consolidated EBITDA, raw materials prices, revenue streams or business performancein each case determined at the time of incurrence;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or and any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests or other equity-based awards of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderunder this Agreement;
(ml) Cash Management Obligations obligations under Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof;
(m) Indebtedness which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this clause (m) and then outstanding, does not exceed the greater of $25,000,000 and 25.0% of Consolidated EBITDA (in each case determined at the time of incurrence or assumption, it being understood that any Indebtedness incurred in pursuant to this Section 7.03(m) shall cease to be deemed incurred or outstanding for purposes of this Section 7.03(m) but shall be deemed incurred for the ordinary coursepurposes of this covenant from and after the first date on which the Borrower or such Subsidiary of the Borrower could have incurred such Indebtedness under Section 7.03(s) without reliance on this Section 7.03(m));
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) [Reserved];
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(st) [Reserved];
(u) Indebtedness incurred by of a Non-Loan PartyParty which, and guarantees thereof by Non-Loan Party, in an aggregate when aggregated with the principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the all other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”u) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount then outstanding, does not to exceed the greater of (x) $500,000,000 15,000,000 and (y) 30.015.0% of Consolidated EBITDA (in each case determined at the date of the Parent Borrower incurrence or issuance, it being understood that any Indebtedness incurred pursuant to this Section 7.03(u) shall cease to be deemed incurred or outstanding for purposes of this Section 7.03(u) but shall be deemed incurred or issued for the most recently ended Test Period at any one time outstandingpurposes of this covenant from and after the first date on which the Borrower or such Subsidiary could have incurred such Indebtedness under Section 7.03(s) without reliance on this Section 7.03(u));
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[Reserved];
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: First Amendment to Credit Agreement (Portillo's Inc.), First Amendment to Credit Agreement (Portillo's Inc.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
Documents and (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount under this clause (ii) not to exceed $2,250,000,000 500,000,000 and any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and as listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee (other than Guarantees by a Foreign Subsidiary of Indebtedness of another Foreign Subsidiary) of any Senior Notes or any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Alight Inc. / DE), Credit Agreement (Alight Inc. / DE)
Indebtedness. Create(a) The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its the Restricted Subsidiaries in respect of under the Loan Documents (including any Ratably Secured Existing NotesIndebtedness incurred pursuant to Section 2.20, 2.21 or 2.24);
(ii) Surviving Indebtedness listed (A) outstanding on the Effective Date; provided that any such Indebtedness in excess of $10,000,000 individually shall only be permitted if set forth on Schedule 7.03(c6.01, and any Permitted Refinancing thereof and (B) that is intercompany Indebtedness among the Borrower and/or the Restricted Subsidiaries outstanding on the Effective Date and any Permitted Refinancing thereof (so long as, in the case of this clause (B), any such Permitted Refinancing is intercompany Indebtedness);
(iii) any Permitted Refinancing of any of Guarantees by the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its the Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) such Guarantee is otherwise permitted by Section 6.04, (B) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Loan Document Obligations pursuant to the Guarantee Agreement and (C) if the Indebtedness being guaranteed Guaranteed is subordinated to the Loan Document Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Loan Document Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(eiv) Indebtedness of the Parent Borrower or of any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary or the Borrower to the extent constituting an Investment permitted by Section 7.026.04; provided that all such Indebtedness of any Loan Party owed owing to any Person Restricted Subsidiary that is not a Loan Party shall be subject subordinated to the subordination Loan Document Obligations (to the extent any such Indebtedness is outstanding at any time after the date that is 30 days after the Effective Date or such later date as the Administrative Agent may reasonably agree) (but only to the extent permitted by applicable law and not giving rise to material adverse tax consequences) on terms (A) at least as favorable to the Lenders as those set forth in Section 3.01 the form of intercompany note attached as Exhibit H or (B) otherwise reasonably satisfactory to the GuarantyAdministrative Agent;
(fA) (i) Attributable Indebtedness and other Indebtedness (including Capitalized LeasesCapital Lease Obligations) of the Borrower or any of the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (whether through the direct purchase of property or any Person owning such property); provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) 270 days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iiiB) any Permitted Refinancing of any Indebtedness set forth described in the immediately preceding clauses subclause (i) and (iiA); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gvi) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure Agreements (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(yfor speculative purposes);
(ivii) (A) (1) Indebtedness of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary) after the Effective Date as a result of a Permitted Acquisition or other Investment (and any guarantee of such Indebtedness by a Subsidiary of such Person), (2) Indebtedness of any Person that is assumed by the Borrower or any Restricted Subsidiary in connection with an acquisition of assets by the Borrower or such Restricted Subsidiary in a Permitted Acquisition or other Investment and (3) any guarantee of Indebtedness described in the foregoing clauses (1) and (2) by any Person that so becomes a Restricted Subsidiary, that is the survivor of a merger or consolidation with such Person or that is a Subsidiary of such Person; provided that such Indebtedness (or guarantee thereof) is not incurred in contemplation of such Permitted Acquisition or other Investment; and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);
(viii) Indebtedness in respect of any Qualified Securitization Facility;
(ix) Indebtedness representing deferred compensation to employees and other service providers of the Parent Borrower (or any direct or indirect parent of and the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jx) Indebtedness consisting of unsecured promissory notes issued by the Borrower or any Restricted Subsidiary to current or former officers, directors, partners, managers, consultants directors and employees, employees or their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding6.08(a);
(kxi) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsadjustments (including “earn out” or similar obligations and mark to market adjustments with respect to the foregoing) incurred in connection with any Permitted Acquisition, any other Investment or any Disposition, in each case permitted under this Agreement;
(lxii) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and any Permitted Acquisitions Acquisition or any other Investment expressly permitted hereunder;
(mxiii) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case and Indebtedness arising from the honoring of a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds (including Indebtedness owed on a short term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary coursecourse of business of the Borrower and its Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Borrower and its Restricted Subsidiaries);
(nxiv) Indebtedness of the Borrower and the Restricted Subsidiaries; provided that at the time of the incurrence thereof and after giving Pro Forma Effect thereto, the aggregate principal amount of Indebtedness outstanding in reliance on this clause (xiv) shall not exceed (x) the greater of $110,000,000 and 100% of Consolidated EBITDA for the most recently ended Test Period as of such time determined on a Pro Forma Basis (this clause (x), the “General Debt Basket”), minus (y) the General Debt Basket Reallocated Amount (if any);
(xv) Indebtedness consisting of (aA) the financing of insurance premiums or (bB) take or take-or-pay obligations contained in supply arrangements, in each case, case in the ordinary course of business;
(oxvi) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created created, or related to obligations or liabilities incurred, in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pxvii) obligations in respect of performance, bid, appeal and surety bonds and performance performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qxviii) Indebtedness of the Borrower and the Restricted Subsidiaries consisting of guarantees of the obligations of any Person of which the Borrower or any Restricted Subsidiary owns any Equity Interest; provided that at the time of the incurrence thereof and after giving Pro Forma Effect thereto, the aggregate principal amount of Indebtedness outstanding in reliance on this clause (xviii) shall not exceed the greater of $30,000,000 and 25% of Consolidated EBITDA for the most recently ended Test Period as of such time determined on a Pro Forma Basis;
(A) Indebtedness of the Borrower or any of the Restricted Subsidiaries; provided that, after giving effect to the incurrence of such Indebtedness (and any Permitted Acquisition or other permitted Investment consummated in connection therewith) on a Pro Forma Basis, either (1) the Interest Coverage Ratio is greater than or equal to the lesser of (x) the Interest Coverage Ratio in effect immediately prior to
(xx) the incurrence of such Indebtedness and (y) 1.75 to 1.00 or (2) the Total Leverage Ratio is equal to or less than the greater of (x) the Total Leverage Ratio in effect immediately prior to the incurrence of such Indebtedness and (y) 7.00 to 1.00 and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A);
(xxi) Indebtedness supported by a Letter letter of Credit credit issued pursuant to this Agreement or any other letter of credit, bank guarantee or similar instrument permitted by this Section 6.01(a), in a principal amount not to exceed the face amount of such Letter letter of Creditcredit, bank guarantee or such other instrument Permitted Unsecured Refinancing Debt and any Permitted Refinancing thereof;
(rxxii) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt, and, in each case, any Permitted Refinancing thereof;
(iA) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary Loan Party issued in an aggregate amount not to exceed lieu of Incremental Facilities (A) $1,000,000,000 at the time of any incurrence pursuant to such Indebtedness incurred under this clause (Axxiii), “Incremental Equivalent Debt”) consisting of secured or unsecured loans, bonds, notes or debentures; provided that (when aggregated with x) the aggregate principal amount of Permitted Refinancings in respect of Indebtedness originally Incremental Equivalent Debt incurred pursuant to this clause (Axxiii), together with the aggregate principal amount of Incremental Facilities incurred at such time, shall not exceed the Incremental Cap at the time of incurrence of such Incremental Equivalent Debt and (y) that are consummated such Indebtedness complies with the Required Additional Debt Terms (provided that, except as set forth in reliance on this subclause (y) or sub-clause (x) above, for the avoidance of doubt, the terms and conditions applicable to Incremental Facilities set forth in Section 7.03(r)(ii2.20 shall not apply with respect to Incremental Equivalent Debt) below) plus and (B) unlimited additional unsecured or junior lien Indebtednessany Permitted Refinancing of Indebtedness incurred pursuant to the foregoing clause (A) (provided that, so long as either for purposes of this clause (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further thatxxiii), in the case of any Indebtedness Incremental Equivalent Debt that is not incurred under this in reliance on clause (ra), (1b) such Indebtedness shall not mature prior or (c) of the definition of “Incremental Cap” and that is (I) secured by a Lien on the Collateral ranking on a junior priority basis to the date that is 91 days after Lien on the Maturity Date Collateral securing the Secured Obligations, in lieu of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 daysFirst Lien Leverage Ratio test applicable thereto, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal an unlimited amount of Indebtedness that Incremental Equivalent Debt may be incurred pursuant to this under clause (rd) and Section 7.03(vof the definition of “Incremental Cap” so long as, after giving effect to the relevant incurrence of Incremental Equivalent Debt, either (a) by Non-Loan Parties shall the Secured Leverage Ratio does not exceed the greater of (x) $400,000,000 6.75 to 1.00 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, Secured Leverage Ratio in an aggregate principal amount not effect immediately prior to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such IndebtednessIncremental Equivalent Debt, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loansin each case, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis, or (b) as the Interest Coverage Ratio is no less than the lesser of the most recent Test Period is either (x) not greater than 7.00:1.00 or 1.75 to 1.00 and (y) not greater than the Total Leverage Interest Coverage Ratio in effect immediately prior to the consummation incurrence of such Permitted Acquisition and the incurrence or assumption of such IndebtednessIncremental Equivalent Debt, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligationsin each case, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 , or (yII) not greater than unsecured, in lieu of the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Partiestest applicable thereto, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal unlimited amount of Indebtedness that Incremental Equivalent Debt may be incurred pursuant to this under clause (vd) and Section 7.03(rof the definition of “Incremental Cap” so long as, after giving effect to the relevant incurrence of Incremental Equivalent Debt, either (a) by Non-Loan Parties shall the Total Leverage Ratio does not exceed the greater of (x) $400,000,000 7.00 to 1.00 and (y) 25.0the Total Leverage Ratio in effect immediately prior to giving effect to the incurrence of such Incremental Equivalent Debt, in each case, calculated on a Pro Forma Basis, or (b) the Interest Coverage Ratio is no less than the lesser of (x) 1.75 to 1.00 and (y) the Interest Coverage Ratio in effect immediately prior to the incurrence of such Incremental Equivalent Debt, in each case, calculated on a Pro Forma Basis);
(A) Indebtedness in an aggregate principal amount, measured at the time of incurrence and after giving Pro Forma Effect thereto and the use of the proceeds thereof, not to exceed 200% of the aggregate amount of direct or indirect equity investments in cash or Permitted Investments in the form of common Equity Interests or Qualified Equity Interests (excluding, for the avoidance of doubt, any Cure Amounts) received by the Borrower, any Restricted Subsidiary or any Parent Entity (to the extent contributed to the Borrower or a Restricted Subsidiary in the form of common Equity Interests or Qualified Equity Interests) after the Effective Date to the extent not included within the Available Equity Amount or applied to increase any other basket hereunder and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing clause (A);
(xxv) Indebtedness of any Restricted Subsidiary that is not a Loan Party; provided that either (A) such Indebtedness constitutes Non-Recourse Indebtedness or (B) the aggregate principal amount of Indebtedness (other than any such Indebtedness that constitutes Non-Recourse Indebtedness) of which the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan Party outstanding in reliance on this clause (xxv)(B) shall not exceed, at the time of incurrence thereof and after giving Pro Forma Effect thereto, the greater of $110,000,000 and 100% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one as of such time outstandingdetermined on a Pro Forma Basis;
(ixxvi) (A) Indebtedness of the Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition or other Investment (or assumed in connection therewith); provided that the aggregate principal amount of such Indebtedness at an time outstanding shall not exceed the greater of $60,000,000 and 50% of Consolidated EBITDA for the most recently ended Test Period as of such time determined on a Pro Forma Basis and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing clause (A);
(xxvii) Indebtedness in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% Capital Lease Obligations arising out of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms any Sale Leaseback and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(xxxviii) Indebtedness with respect to any Permitted Receivables Financing[reserved];
(xxix) (A) an additional amount of Indebtedness in an amount equal to 200% of the sum of (x) the then available Restricted Payment capacity under Section 6.08(a) in lieu of Restricted Payments permitted under Section 6.08(a), (y) the then available Restricted Debt Payment capacity under Section 6.08(b) in lieu of Restricted Debt Payments permitted under Section 6.08(b) and (z) the then available Investment capacity under Section 6.04 in lieu of Investments permitted under Section 6.04 (it being understood that 50% of such Indebtedness in respect shall be deemed (a) a Restricted Payment for purposes of compliance with Section 6.08(a), (b) a Restricted Debt Payment for purposes of compliance with Section 6.08(b) or (c) an Investment for purposes of compliance with Section 6.04, as applicable) and (B) any Permitted Debt Exchange Notes Refinancing of Indebtedness incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 the foregoing clause (A);
(xxx) unfunded pension fund and any Permitted Refinancing thereofother employee benefit plan obligations and liabilities to the extent that they are permitted to remain unfunded under applicable law; and
(zxxxi) all premiums (if any), interest (including post-petition interestinterest and interest paid in kind), fees, expenses, charges and additional or contingent interest on obligations described in clauses (ai) through (yxxx) above. For purposes Accrual of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify interest or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interestdividends, the accretion of accreted value value, the accretion or amortization of original issue discount and the payment of interest or dividends in the form of additional Indebtedness shall or Disqualified Equity Interests will not be deemed to be an incurrence of Indebtedness or Disqualified Equity Interests for purposes of this Section 7.03covenant.
Appears in 2 contracts
Sources: Credit Agreement (Entrata, Inc.), Credit Agreement (Entrata, Inc.)
Indebtedness. Create, incur, assume or suffer to exist Incur any Indebtedness, except:
(a) Indebtedness of the Parent GBT, any Borrower and any of its their Subsidiaries under the Loan DocumentsDocuments (including pursuant to Sections 2.14, 2.15 and 2.17);
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof[Reserved];
(c) Indebtedness existing on the Restatement Date (ix) Indebtedness with an individual value not in excess of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, $10,000,000 or (iiy) Surviving Indebtedness listed on Schedule 7.03(c) and in each case of the foregoing clauses (iiix) and (y), any Permitted Refinancing of any of the foregoingIndebtedness thereof;
(d) Guarantee Obligations Guarantees of the Parent GBT, any Borrower and its their Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower GBT or any Restricted Subsidiary of its Subsidiaries otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (i) if the Indebtedness being guaranteed is subordinated in right of payment to the Obligations, such Guarantee Obligation Guarantees shall be subordinated in right of payment to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (ii) no Guarantee by any Restricted Subsidiary of any Indebtedness for borrowed money of a Loan Party shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations;
(e) Indebtedness of the Parent GBT, any Borrower or any Restricted Subsidiary (i) owing to the Parent GBT, any Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party pursuant to this clause (i) shall be subject to the subordination Subordinated Intercompany Note or (ii) owing to any Parent Entity that is not a Loan Party or any other direct or indirect shareholder of such a Parent Entity or GBT; provided that all such Indebtedness pursuant to this clause (ii) shall be unsecured and subordinated in right of payment to the Obligations on terms set forth reasonably acceptable to the Administrative Agent and shall mature no earlier than 91 days following the Latest Maturity Date (as in Section 3.01 effect on the date of the Guarantyincurrence of such Indebtedness);
(f) (i) Attributable Indebtedness Capitalized Lease Obligations, Purchase Money Obligations and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (assets; provided that (x) such Indebtedness is incurred Incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement replacement, lease or improvement), (y) such Indebtedness is not incurred to acquire the Equity Interests of any Person, and (z) the aggregate principal amount of such Indebtedness pursuant to clause (i) (when aggregated with the amount of Permitted Refinancing Indebtedness pursuant to clause (ii) Attributable in respect of such Indebtedness arising out then outstanding), measured at the time of Incurrence and after giving pro forma effect thereto and the use of the proceeds thereof, shall not, except as contemplated by the definition of “Permitted Sale Leasebacks in an aggregate principal amount not to Refinancing Indebtedness”, exceed at any one time outstanding the greater of (xa) $100,000,000 65,000,000 and (yb) 6.015% of Consolidated EBITDA of the Parent Borrower GBT and its Restricted Subsidiaries for the Test Period most recently ended Test Period on or prior to the date such Indebtedness is Incurred (measured as of such date) based upon the Section 6.01 Financials most recently delivered on or prior to such date, and (iiiii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Incurred to Refinance such Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower GBT or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lh) Indebtedness consisting in respect of obligations Swap Contracts incurred in the ordinary course of business and not for speculative purposes;
(i) Indebtedness assumed after the Parent Restatement Date in connection with any Permitted Acquisition (or similar Investment not prohibited hereunder); provided that (A) the only obligors with respect to any Indebtedness Incurred pursuant to this clause (i) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition or Investment (or in the case of a purchase of assets not constituting Equity Interests, the purchaser of such assets), (B) such Indebtedness was not created in contemplation of such Permitted Acquisition or Investment and (C) to the extent such Indebtedness is secured by a Lien on any assets or property of GBT, any Borrower or any of its Restricted Subsidiaries under Subsidiary, it shall be subject to any applicable limitations set forth in Section 7.01(n);
(i) Indebtedness representing deferred compensation to officers, directors, partners, managers, employees, consultants, independent contractors or other service providers of GBT, any Borrower or any Restricted Subsidiary Incurred in the ordinary course of business; and (ii) to the extent constituting Indebtedness, other similar arrangements incurred Incurred by such Person Persons in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderunder Section 7.02 (other than Section 7.02(f) and Section 7.02(cc);
(mk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course[reserved];
(nl) Indebtedness consisting of (a) the financing of insurance premiums promissory notes issued by any Loan Party or (b) take Restricted Subsidiary to future, present or pay obligations contained in supply arrangementsformer officers, in each casedirectors, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of creditpartners, bank guaranteesmanagers, bankers’ acceptancesemployees, warehouse receipts or similar instruments issued or created in the ordinary course of businessconsultants, including in respect of workers compensation claims, health, disability independent contractors or other employee benefits service providers (or propertytheir respective Immediate Family Members) of GBT, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at finance the time retirement, acquisition, repurchase, purchase or redemption of any incurrence pursuant to this clause (A) (when aggregated with the amount Equity Interests of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further thatGBT, in the each case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, by Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof7.06;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Amendment No. 2 (Global Business Travel Group, Inc.), Amendment No. 1 (Global Business Travel Group, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan DocumentsObligations;
(b) Indebtedness in respect of (i) Swap Contracts entered into by the Borrowers Borrower or any of its Subsidiaries in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates and (ii) in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofWarrant Transactions;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) the Convertible Senior Notes and (iii) the subordinated Guarantee in respect thereof and any Permitted Refinancing of any of the foregoingIndebtedness with respect thereto;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or a Subsidiary owed to the Borrower or a Subsidiary, which Indebtedness shall (i) in the case of Indebtedness owed to a Loan Party, constitute Pledged Indebtedness, (ii) in the case of Indebtedness owed by a Loan Party to a Subsidiary that is not a Loan Party, be subordinated to the Obligations on terms substantially similar to (and in any Restricted Subsidiary event not materially less favorable to the Lenders than) those set forth in Exhibit H and (iii) be otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue under the provisions of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03);
(e) Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any Permitted Refinancing Indebtedness with respect thereto;
(f) (i) Guarantees by any Loan Party of Indebtedness (other than the Convertible Senior Notes) of any other Loan Party; provided that, that if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
, (eii) Indebtedness of the Parent Borrower or Guarantees by any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to of Indebtedness of any Subsidiary that is not a Loan Party; and (iii) Guarantees by any Loan Party of Indebtedness of any Subsidiary that is not Loan Party; provided, in the subordination terms set forth in Section 3.01 case of each of the Guaranty;
(f) foregoing clauses (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of and (iii), that (x) $100,000,000 the Indebtedness being Guaranteed is otherwise permitted under this Section 7.02 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) Guarantee is otherwise permitted under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period7.03;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (iifor borrowed money) entered into in order which may be deemed to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect exist pursuant to any interest-bearing liability guaranties, warranty or investment contractual service obligations, performance, surety, statutory, appeal, bid, payment (other than payment of the Parent Borrower Indebtedness) or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams completion or business performance;
(h) Guarantee Obligations with respect to, performance guaranties or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries similar obligations incurred in the ordinary course of business;
(jh) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and other cash management, intercompany cash pooling and similar arrangements in connection with deposit accounts, in each case incurred in the ordinary coursecourse of business;
(ni) Indebtedness of the Borrower or any of its Subsidiaries consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business, in an aggregate amount not to exceed $2,500,000 at any time outstanding;
(oj) Indebtedness incurred by of the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankersworkers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability payment obligations in connection with health or other employee benefits or propertytypes of social security benefits, casualty or liability insurance or self-insurance unemployment or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performanceinsurance obligations, bid, appeal reclamation and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretostatutory obligations, in each case in the ordinary course of business;
(k) Indebtedness consisting of the financing of insurance premiums in the ordinary course of business or consistent with past practice;
(ql) Indebtedness supported by a Letter in respect of Credit self-insurance obligations to the extent incurred in a principal amount not to exceed the face amount ordinary course of such Letter of Creditbusiness in accordance with customary industry practices in amounts customary in the Borrower’s and its Subsidiaries’ industry;
(rm) client advances or deposits received in the ordinary course of business;
(n) Indebtedness of the Borrower or any of its Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, the applicable reimbursement obligation is reimbursed in full within 30 days;
(o) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations and purchase money obligations of the Borrower and its Subsidiaries (or Indebtedness to finance the development, construction, lease, repairs, additions or improvements to property (real or personal)) incurred (i) other unsecured or junior lien Indebtedness than as a result of the Parent Borrower or any Restricted Subsidiary I/T Restructuring, in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 40,000,000 at any one time outstanding and (ii) as a result of the I/T Restructuring, in an aggregate amount not to exceed $60,000,000 at any time outstanding;
(p) Indebtedness of any Person that becomes a Subsidiary of the Borrower after the date hereof in accordance with the terms of Section 7.03(k) or Section 7.03(o), which Indebtedness is existing at the time such Person becomes a Subsidiary of the Borrower (other than Indebtedness incurred solely in contemplation of such Person’s becoming a Subsidiary of the Borrower), and any Permitted Refinancing thereofIndebtedness with respect thereto;
(sq) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, of Foreign Subsidiaries in an aggregate principal amount not to exceed (A) $600,000,000 75,000,000 at any one time outstanding plus outstanding;
(Br) additional so long as (i) immediately before and immediately after giving pro forma effect to the incurrence thereof, no Default shall have occurred and be continuing and (ii) immediately after giving effect to the incurrence thereof, the Borrower and its Subsidiaries are in compliance on a Pro Forma Basis with all of the covenants set forth in Section 7.10, (x) Permitted Additional Indebtedness incurred from and (y) Permitted Additional Foreign Indebtedness, in an aggregate amount, in the case of Permitted Additional Foreign Indebtedness, not to exceed $225,000,000 at any time outstanding;
(s) to time pursuant to asset based revolving facilities provided by commercial banks the extent constituting Indebtedness, any earn-out or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be obligations incurred in connection with Investments permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;7.03; and
(it) other Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness not otherwise permitted hereunder in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 50,000,000 at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition. To the extent that the creation, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such any Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect could be attributable to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one subsection of the categories of Indebtedness described in clauses (a) through (z) abovethis Section 7.02, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of may allocate such Indebtedness in to any one or more of such subsections and in no event shall the above clausessame portion of Indebtedness be deemed to utilize or be attributable to more than one item; provided provided, that (x) all Indebtedness outstanding under created pursuant to the Loan Documents will shall be deemed to have been incurred in reliance only on Section 7.02(a) and (y) all Indebtedness outstanding in respect of the exception Convertible Senior Notes (including the subordinated Guarantee in clause (arespect thereof) of this Section 7.03 and the Senior Secured Notes will shall be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.02(c).
Appears in 2 contracts
Sources: Credit Agreement (Kinetic Concepts Inc /Tx/), Credit Agreement (Kinetic Concepts Inc)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount not to exceed $2,250,000,000 1,500,000,000 and, in the case of this clause (ii), any Permitted Refinancing thereof and (iii) the Opco Senior Notes Documents in an aggregate principal amount not to exceed $1,000,000,000 and, in the case of this clause (iii), any Permitted Refinancing thereof;
(c) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any 5 5/8% Senior Notes, Opco Senior Notes or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed 5.0% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed in connection with any Permitted Acquisition so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) $100,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long (i) entered into if such Indebtedness is secured on a junior basis to hedge or mitigate risks the Facilities, the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis is no greater than 6.15 to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary)1.00, (ii) entered into in order if such Indebtedness is secured on a pari passu basis with the Facilities, the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than 3.75 to effectively cap, collar 1.00 or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commoditiesif such Indebtedness is unsecured, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of Fixed Charge Coverage Ratio on a consolidated basis for the Parent Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom); provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding 4.25% of Total Assets, in each case to determined at the extent permitted by Section 7.02(y)time of incurrence;
(ih) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of $800,000,000 and 4.0% of Total Assets at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y));
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A) and Section 2.14(d)(v)(B), not to exceed $1,500,000,000; provided that such Indebtedness shall (A) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party, be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (x) in the form of debt securities and (y) subject to the First Lien Intercreditor Agreement and (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding 4.25% of Total Assets, in each case determined at the time of incurrence;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[Reserved];
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 and (y) 25.010% of Consolidated EBITDA Foreign Subsidiary Total Assets;
(w) unsecured Indebtedness of the Parent Borrower or any Restricted Subsidiary, so long as the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended Test Period four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and without duplication, Permitted Refinancings of such Indebtedness; provided that any one time outstanding;
(i) such Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary that is not a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerLoan Party, together with all relevant financial information reasonably requested any Indebtedness incurred by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Aa Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), (B7.03(q) or 7.03(s), (C) and (D) and (ii) does not exceed in the aggregate at any Permitted Refinancing thereoftime outstanding, 4.25% of Total Assets, in each case determined at the time of incurrence;
(x) Indebtedness with respect to any arising from Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofIntercompany Activities; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zx) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, divide or classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents, any Senior Notes Documents and any Opco Senior Notes Documents and, in each case, any Permitted Refinancing thereof, will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.03(a).
Appears in 2 contracts
Sources: Credit Agreement (Hilton Worldwide Holdings Inc.), Credit Agreement (Hilton Worldwide Holdings Inc.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers Term Loans (as defined in respect of the Senior Secured Notes (and Guarantees thereof by Term Loan C Credit Agreement as in effect on the GuarantorsClosing Date) in an aggregate principal amount not to exceed (1) $2,250,000,000 350,000,000 plus (2) the aggregate principal amount of any Incremental Term Loans (as defined in the Term Loan C Credit Agreement) permitted to be incurred pursuant to the Term Loan C Credit Agreement as in effect on the Closing Date and (iii) the RBL Facility in an aggregate principal amount, together with any RBL Pari Debt, not to exceed the greater of (x) $250,000,000 and (y) the Borrowing Base (as defined in the RBL Credit Agreement as in effect on the date hereof); provided that the amount in this clause (a)(iii)(y) shall, during the applicable grace periods set forth in Section 5.2(b) of the RBL Credit Agreement (as in effect on the date hereof), be increased by the amount of any Borrowing Base Deficiency (as defined in the RBL Credit Agreement as in effect on the date hereof) and, in the case of clauses (ii) and (iii), any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of the RBL Facility, RBL Pari Debt, the Term Loan C Facility or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guaranty of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation Guaranty shall be subordinated to the Guarantee Guaranty of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all any such Indebtedness of any owing to a Restricted Subsidiary that is not a Loan Party owed is subordinated in right of payment to the Loans (for the avoidance of doubt, any Person such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be subject deemed to be expressly subordinated in right of payment to the subordination Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(fe) (i) other than as set forth in the following clause (iii), Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of $47,500,000 and 3.125% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks sale-leaseback transactions permitted by Section 7.05(m), (iii) Attributable Indebtedness (including Capitalized Leases) incurred from, or arising out of, financing the acquisition, replacement, lease or improvement of compressors (or similar equipment) in an aggregate principal amount not to exceed at any one time outstanding the greater of $30,000,000 and 2% of Total Assets, in each case determined at the time of incurrence (xtogether with any Permitted Refinancings thereof) $100,000,000 at any time outstanding and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iiiiv) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts that, individually, or in pairings or groups, (i) entered into are designed to hedge or mitigate risks to which against the Parent Borrower Borrower’s or any Subsidiary has actual Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or anticipated exposure commodities pricing risks (other than those including in respect of shares forecasted production) and entered into Not For Speculative Purposes and (ii) in connection with a proposed or pending acquisition of capital stock or other equity ownership interests Oil and Gas Properties (a “Proposed Acquisition”), in respect of incremental hedging contracts with respect to the Loan Parties’ reasonably anticipated projected production from the total Proved Reserves of the Parent Borrower or any Subsidiary)and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Loan Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (1) the date on which such Loan Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (2) the earliest of (A) the date of consummation of such Proposed Acquisition, (B) the date of termination of such Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement; provided however all such incremental hedging contracts permitted under this clause (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability a Proposed Acquisition must be terminated or investment unwound within 90 days following the date of termination of such Proposed Acquisition;
(g) Indebtedness of the Parent Borrower or any Restricted Subsidiary (x) incurred or (y) assumed in connection with any Permitted Acquisition or similar Investment so long as, in the case of Indebtedness assumed pursuant to clause (y) hereof, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or similar Investment, and any Permitted Refinancing thereof; provided that, after giving pro forma effect to such Permitted Acquisition or similar Investment and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) the greater of $37,500,000 and 2.5% of Total Assets at any time outstanding plus (y) any additional amount of such Indebtedness so long as (i) if such Indebtedness is unsecured, either (A) the Consolidated Total Net Leverage Ratio determined on Pro Forma Basis (determined without netting the cash proceeds of any such Indebtedness) would be lower than the Consolidated Total Net Leverage Ratio immediately prior thereto or (B) the Borrower would be permitted to incur $1.00 of Permitted Ratio Debt pursuant to clause (ii)(y) of the definition thereof, (ii) if such Indebtedness is secured, either (A) the Borrower would be entitled to incur $1.00 of Permitted Ratio Debt pursuant to clause (ii)(x) of the definition thereof or (B) solely with respect to Indebtedness assumed under clause (y) hereof, the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis (determined without netting the cash proceeds of any such Indebtedness) would be lower than immediately prior thereto; provided that in the case of Indebtedness incurred pursuant to clause (x) hereof, any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s) and 7.03(q), does not exceed in the aggregate at any time outstanding the greater of $47,500,000 and 3.125% of Total Assets, in each case determined at the time of incurrence and (iii) entered into shall have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is secured and have a Weighted Average Life to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceMaturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(i) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of $65,000,000 and 4.375% of Total Assets at any time outstanding plus (y) 100% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y)) and (ii) Permitted Refinancing thereof;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured secured Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior lien Indebtedness of basis to the Parent Borrower or any Restricted Subsidiary Facilities, and (ii) unsecured Indebtedness, in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (principal amount, when aggregated with the principal amount of Permitted Refinancings in respect of Indebtedness originally incurred Incremental Term Loans pursuant to this clause Section 2.14(d)(v)(A) and the Incremental Term Loan C Base Amount at such time, not to exceed $150,000,000; provided that such Indebtedness shall (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)i)(x) above, (1) such Indebtedness shall not mature prior to the have a maturity date that is 91 after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (i)(y) and (ii) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date of at the Term B Loans or time such Indebtedness is incurred, (B) have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysFacilities, (2C) if such Indebtedness shall not have mandatory prepaymentis secured on a junior lien basis by a Loan Party, redemption or offer to purchase events more onerous than those applicable be subject to the Term B LoansRBL Intercreditor Agreement and the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (3x) in the other form of debt securities and (y) subject to the RBL Intercreditor Agreement and the Pari Passu Lien Intercreditor Agreement and (D) have covenants and events of default (excluding, for the avoidance of doubt, pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the covenants and events of default of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)) unless (x) the Lenders of the Term Loans receive the benefit of such more restrictive terms or (y) any such provisions apply after the Latest Maturity Date or shall otherwise be reasonably satisfactory to Administrative Agent (it being understood that to the extent any financial maintenance covenant is added for the benefit of any such Indebtedness, no consent shall be required from the Administrative Agent or any of the Lenders to the extent that such financial maintenance covenant (together with any related “equity cure” provisions) is also added for the benefit of any corresponding existing Facility); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g) or 7.03(s), does not exceed in the aggregate at any time outstanding, the greater of $47,500,000 and 3.125% of Total Assets, in each case determined at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause incurrence;
(r) Indebtedness associated with bonds or surety obligations required by any Law or by Governmental Authorities in connection with the operation of Oil and Section 7.03(vGas Properties in the ordinary course of business;
(s) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 Permitted Ratio Debt and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(st) Credit Agreement Refinancing Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Credit Agreement Refinancing Indebtedness (as defined in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) Loan C Credit Agreement as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Ahereof), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinatedbehalf of, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.G
Appears in 2 contracts
Sources: Term Loan B Credit Agreement (Vine Resources Inc.), Term Loan B Credit Agreement (Vine Resources Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan DocumentsPermitted Subordinated Indebtedness;
(b) Indebtedness of the Borrowers in respect of Loan Parties under the Senior Secured Notes Loan Documents (and Guarantees thereof by and, until the Guarantors) in an aggregate principal amount not Spin-Off occurs, Indebtedness pursuant to exceed $2,250,000,000 and any Permitted Refinancing thereofthe Existing FNIS Credit Agreement);
(c) (i) Indebtedness of outstanding on the Parent Borrower Closing Date and listed on Schedule 7.03 and any of its Restricted Subsidiaries Permitted Refinancing thereof and (ii) Indebtedness in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) the Senior Notes and (iii) any Permitted Refinancing of any of the foregoingthereof;
(d) Guarantee Obligations of the Parent Borrower and its Guarantees by a Restricted Subsidiaries Company in respect of Indebtedness of the Parent Borrower or another Restricted Company otherwise permitted hereunder; provided that (x) no Guarantee by any Restricted Subsidiary otherwise of any Senior Note or any Permitted Subordinated Indebtedness (or any Permitted Refinancing thereof) shall be permitted hereunder unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Subsidiary Guarantee in accordance with Section 6.12 and (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, y) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any a Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting Company that constitutes an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person Subsidiary that is not a Loan Party shall must be subject expressly subordinated to the subordination terms set forth in Section 3.01 Obligations of the Guarantysuch Loan Party, it being understood that such Loan Party may make payments thereon unless an Event of Default has occurred and is continuing;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing incurred in the acquisition, construction, repair, replacement or improvement ordinary course of fixed or capital assets (provided that such Indebtedness is incurred concurrently business by the Like-Kind-Exchange Companies in connection with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA “1031 exchange” transactions under Section 1031 of the Parent Borrower for Code (or regulations promulgated thereunder, including Revenue Procedure 2000-37) that is limited in recourse to the most recently ended Test Period and properties (iiireal or personal) any Permitted Refinancing which are the subject of any Indebtedness set forth in such “1031 exchange” transactions (collectively, the immediately preceding clauses (i) and (ii“Specified Non-Recourse Indebtedness” ); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) subject to the Specified Debt Test, Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests Foreign Restricted Subsidiaries of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceBorrower;
(h) Guarantee Obligations with respect to, or subject to the assumption ofSpecified Debt Test, Indebtedness of Franchiseesa Restricted Company assumed in connection with any Permitted Acquisition and not incurred in contemplation thereof, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)any Permitted Refinancing thereof;
(i) Indebtedness incurred by any Restricted Company representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its a Restricted Subsidiaries Company incurred in the ordinary course of business;
(j) Indebtedness consisting of promissory notes issued by any Restricted Company to current future, present or former directors, officers, directorsmembers of management, partners, managers, employees or consultants and employees, of the Borrower or any of its Subsidiaries or their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06(c);
(k) Indebtedness incurred by the Parent Borrower or any of its a Restricted Subsidiaries Company in a Permitted Acquisition, any other Investment expressly permitted hereunder Acquisition or any Disposition, in each case to the extent Disposition constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries Company under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderAcquisitions;
(m) Cash Management Obligations and other Indebtedness (including intercompany Indebtedness among the Restricted Companies) in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseCash Management Practices;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations of a Restricted Company contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of bid, performance, bidstay, customs, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its a Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretoCompany, in each case in the ordinary course of business or consistent with past practice;
(p) Guarantees by the Borrower of Indebtedness permitted under this Section 7.03;
(q) Indebtedness supported by a Letter in respect of Credit Swap Contracts entered into in a principal amount the ordinary course of business and not to exceed the face amount of such Letter of Creditfor speculative purposes;
(r) Indebtedness incurred in connection with a receivables securitization transaction involving the Restricted Companies and a Securitization Vehicle (a “Securitization Financing” ); provided that (i) other unsecured or junior lien the Net Cash Proceeds of such Indebtedness are applied to prepay the Term Loans pursuant to Section 2.05(b), (ii) such Indebtedness when incurred shall not exceed 100% of the Parent Borrower cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition, (iii) such Indebtedness is created and any Restricted Subsidiary in an aggregate amount Lien attaches to such property concurrently with or within forty-five (45) days of the acquisition thereof, and (iv) such Lien does not to exceed at any time encumber any property other than the property financed by such Indebtedness;
(Ai) $1,000,000,000 at the time of any incurrence pursuant to this clause Attributable Indebtedness and purchase money obligations (A) (when aggregated with the amount of Permitted Refinancings including obligations in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated mortgage, industrial revenue bond, industrial development bond and similar financings), in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as each case of the end Borrower or a Restricted Subsidiary to finance the purchase, repair or improvement of fixed or capital assets within the most recent Test Period is not greater than 7.00:1.00 or (ylimitations set forth in Section 7.01(p) and any Permitted Refinancing thereof, provided that the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end aggregate principal amount of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any all such Indebtedness incurred under this clause (r), (1i) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 35,000,000 at any one time outstanding and (ii) any Permitted Refinancing thereofIndebtedness secured by Liens permitted under Sections 7.01(e)(ii), 7.01(f) or 7.01(r);
(st) subject to the Specified Debt Test, other Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, of Restricted Companies in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 350,000,000 and (y) 30.015% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofShareholders’ Equity; and
(zu) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yt) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.;
Appears in 2 contracts
Sources: Credit Agreement (Lender Processing Services, Inc.), Credit Agreement (Lender Processing Services, Inc.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers Term Loans (as defined in respect of the Senior Secured Notes (and Guarantees thereof by Term Loan B Credit Agreement as in effect on the GuarantorsClosing Date) in an aggregate principal amount not to exceed (1) $2,250,000,000 500,000,000 plus (2) the aggregate principal amount of any Incremental Term Loans (as defined in the Term Loan B Credit Agreement) permitted to be incurred pursuant to the Term Loan B Credit Agreement as in effect on the Closing Date and (iii) the RBL Facility in an aggregate principal amount, together with any RBL Pari Debt, not to exceed the greater of (x) $250,000,000 and (y) the Borrowing Base (as defined in the RBL Credit Agreement as in effect on the date hereof); provided that the amount in this clause (a)(iii)(y) shall, during the applicable grace periods set forth in Section 5.2(b) of the RBL Credit Agreement (as in effect on the date hereof), be increased by the amount of any Borrowing Base Deficiency (as defined in the RBL Credit Agreement as in effect on the date hereof) and, in the case of clauses (ii) and (iii), any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of the RBL Facility, RBL Pari Debt, the Term Loan B Facility, Term Loan B Pari Debt or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guaranty of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation Guaranty shall be subordinated to the Guarantee Guaranty of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all any such Indebtedness of any owing to a Restricted Subsidiary that is not a Loan Party owed is subordinated in right of payment to the Loans (for the avoidance of doubt, any Person such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be subject deemed to be expressly subordinated in right of payment to the subordination Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(fe) (i) other than as set forth in the following clause (iii), Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of $47,500,000 and 3.25% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks sale-leaseback transactions permitted by Section 7.05(m), (iii) Attributable Indebtedness (including Capitalized Leases) incurred from, or arising out of, financing the acquisition, replacement, lease or improvement of compressors (or similar equipment) in an aggregate principal amount not to exceed at any one time outstanding the greater of $32,500,000 and 2.125% of Total Assets, in each case determined at the time of incurrence (xtogether with any Permitted Refinancings thereof) $100,000,000 at any time outstanding and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iiiiv) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts that, individually, or in pairings or groups, (i) entered into are designed to hedge or mitigate risks to which against the Parent Borrower Borrower’s or any Subsidiary has actual Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or anticipated exposure commodities pricing risks (other than those including in respect of shares forecasted production) and entered into Not For Speculative Purposes and (ii) in connection with a proposed or pending acquisition of capital stock or other equity ownership interests Oil and Gas Properties (a “Proposed Acquisition”), in respect of incremental hedging contracts with respect to the Loan Parties’ reasonably anticipated projected production from the total Proved Reserves of the Parent Borrower or any Subsidiary)and its Restricted Subsidiaries as forecast based upon the most recent Reserve Report having notional volumes not in excess of 15% of the Loan Parties’ existing projected production prior to the consummation of such Proposed Acquisition (such that the aggregate shall not be more than 100% of the reasonably anticipated projected production prior to the consummation of such Proposed Acquisition) for a period not exceeding 36 months from the date such hedging arrangement is created during the period between (1) the date on which such Loan Party signs a definitive acquisition agreement in connection with a Proposed Acquisition and (2) the earliest of (A) the date of consummation of such Proposed Acquisition, (B) the date of termination of such Proposed Acquisition and (C) 90 days after the date of execution of such definitive acquisition agreement; provided however all such incremental hedging contracts permitted under this clause (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability a Proposed Acquisition must be terminated or investment unwound within 90 days following the date of termination of such Proposed Acquisition;
(g) Indebtedness of the Parent Borrower or any Restricted Subsidiary (x) incurred or (y) assumed in connection with any Permitted Acquisition or similar Investment so long as, in the case of Indebtedness assumed pursuant to clause (y) hereof, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or similar Investment, and any Permitted Refinancing thereof; provided that, after giving pro forma effect to such Permitted Acquisition or similar Investment and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) the greater of $40,000,000 and 2.625% of Total Assets at any time outstanding plus (y) any additional amount of such Indebtedness so long as (i) if such Indebtedness is unsecured, either (A) the Consolidated Total Net Leverage Ratio determined on Pro Forma Basis (determined without netting the cash proceeds of any such Indebtedness) would be lower than the Consolidated Total Net Leverage Ratio immediately prior thereto or (B) the Borrower would be permitted to incur $1.00 of Permitted Ratio Debt pursuant to clause (ii)(y) of the definition thereof, (ii) if such Indebtedness is secured, either (A) the Borrower would be entitled to incur $1.00 of Permitted Ratio Debt pursuant to clause (ii)(x) of the definition thereof or (B) solely with respect to Indebtedness assumed under clause (y) hereof, the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis (determined without netting the cash proceeds of any such Indebtedness) would be lower than immediately prior thereto; provided that in the case of Indebtedness incurred pursuant to clause (x) hereof, any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s) and 7.03(q), does not exceed in the aggregate at any time outstanding the greater of $47,500,000 and 3.25% of Total Assets, in each case determined at the time of incurrence and (iii) entered into shall have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is secured and have a Weighted Average Life to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceMaturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(i) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of $67,500,000 and 4.50% of Total Assets at any time outstanding plus (y) 100% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y)) and (ii) Permitted Refinancing thereof;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured secured Indebtedness incurred on (x) a pari passu basis with the Term Loan B Facility or (y) a pari passu or junior lien Indebtedness of basis to the Parent Borrower or any Restricted Subsidiary Facility, and (ii) unsecured Indebtedness, in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (principal amount, when aggregated with the principal amount of Permitted Refinancings in respect of Indebtedness originally incurred Incremental Term Loans pursuant to this clause Section 2.14(d)(v)(A) and the Incremental Term Loan B Base Amount at such time, not to exceed $150,000,000; provided that such Indebtedness shall (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)i)(x) above, (1) such Indebtedness shall not mature prior to the have a maturity date that is 91 after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (i)(y) and (ii) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date of at the Term B Loans or time such Indebtedness is incurred, (B) have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysFacilities, (2C) if such Indebtedness shall not have mandatory prepaymentis secured on a junior lien basis by a Loan Party, redemption or offer to purchase events more onerous than those applicable be subject to the RBL Intercreditor Agreement, the Term Loan Intercreditor Agreement and the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Term Loan B LoansFacility or any Term Loan B Pari Debt or a pari passu basis with the Facilities, be (3x) in the other form of debt securities and (y) subject to the RBL Intercreditor Agreement, the Term Loan Intercreditor Agreement and, if applicable, the Pari Passu Lien Intercreditor Agreement and (D) have covenants and events of default (excluding, for the avoidance of doubt, pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the covenants and events of default of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)) unless (x) the Lenders of the Term Loans receive the benefit of such more restrictive terms or (y) any such provisions apply after the Latest Maturity Date or shall otherwise be reasonably satisfactory to Administrative Agent (it being understood that to the extent any financial maintenance covenant is added for the benefit of any such Indebtedness, no consent shall be required from the Administrative Agent or any of the Lenders to the extent that such financial maintenance covenant (together with any related “equity cure” provisions) is also added for the benefit of any corresponding existing Facility); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g) or 7.03(s), does not exceed in the aggregate at any time outstanding, the greater of $47,500,000 and 3.25% of Total Assets, in each case determined at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause incurrence;
(r) Indebtedness associated with bonds or surety obligations required by any Law or by Governmental Authorities in connection with the operation of Oil and Section 7.03(v) by Non-Loan Parties shall not exceed Gas Properties in the greater ordinary course of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereofbusiness;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.Refin
Appears in 2 contracts
Sources: Term Loan Credit Agreement (Vine Resources Inc.), Term Loan Credit Agreement (Vine Resources Inc.)
Indebtedness. CreateNone of the Covenant Parties or any of their Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments or any refinancings thereof;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of Closing Date and listed on Schedule 7.03(b) to the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Original Credit Agreement and any Permitted Refinancing thereofrefinancing thereof and, until the first Business Day following the Pushdown Date, the Outstanding Indebtedness and (ii) intercompany Indebtedness outstanding on the Closing Date evidenced by an Intercompany Note and any refinancing thereof evidenced by an Intercompany Note;
(c) (i) Indebtedness of the Parent Borrower Guarantees by any Covenant Party and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower any Covenant Party or any Restricted Subsidiary of a Covenant Party otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any Senior Subordinated Debt, Senior Unsecured Debt or Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower a Covenant Party or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, lease or improvement of a fixed or capital asset incurred by a Covenant Party or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) (i) entered into to hedge or mitigate risks to which the Parent Borrower Indebtedness of any Covenant Party or any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (v) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Debt Documentation as of the Pushdown Date, (w) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Covenant Parties and their Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the latest Maturity Date (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemption provisions satisfying the requirement of clause (y) hereof), (y) has actual or anticipated exposure terms and conditions (other than those in respect of shares of capital stock or other equity ownership interests interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Covenant Parties as the terms and conditions of the Parent Borrower Senior Subordinated Debt; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or any Subsidiary)drafts of the documentation relating thereto, stating that ▇▇▇▇▇▇▇ has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrowers within such five Business Day period that it disagrees with such determination (iiincluding a reasonable description of the basis upon which it disagrees) entered into in order to effectively cap, collar or exchange interest rates and (from fixed to floating rates, from one floating rate to another floating rate or otherwisez) with respect to any interest-bearing liability or investment of such Indebtedness described in the Parent Borrower or any Subsidiary and immediately preceding clause (iii) entered into to hedge commoditiesB), currencies, general economic conditions, raw materials prices, revenue streams or business performanceis incurred by a Loan Party;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (any Covenant Party or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by any Covenant Party or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (NHF or any direct or indirect parent thereof) of NHF permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent Disposition constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of any Covenant Party or any of its Restricted Subsidiaries, in an aggregate principal amount that at the ordinary coursetime of, and after giving effect to, the incurrence thereof, would not exceed $400,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness constituting the Senior Subordinated Debt and/or the Senior Unsecured Debt;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness of non-Guarantor Subsidiaries incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in the ordinary course of business on ordinary business terms in an aggregate principal amount outstanding not to exceed $75,000,000 at any time;
(t) Indebtedness of the Covenant Parties or the Restricted Subsidiaries (i) assumed in connection with any Permitted Acquisition or (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests of a Person and including, for the avoidance of doubt, the assets owned by such Person) and so long as both immediately prior and after giving effect thereto, (A) $600,000,000 at any one time outstanding plus no Default shall exist or result therefrom, (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Company and the Restricted Subsidiaries that are not Loan Parties (and not on will be in Pro Forma Compliance with the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under covenants set forth in Section 7.027.11, and (3C) borrowings under the aggregate principal amount of such asset based revolving facilities shall be subject Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this paragraph (t) does not exceed $200,000,000;
(u) Indebtedness in connection with a borrowing base or similar advance rate criteriaPermitted Receivables Financing;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers pursuant to a Permitted Debt Offering to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, are applied solely to the prepayment of Term Loans in accordance with the manner set forth in Section 2.05(b)(iii)2.05; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) other Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 Offering so long as the aggregate principal amount of such Indebtedness does not exceed the Maximum Incremental Facilities Amount; and (iii) any Permitted Refinancing thereofof the foregoing;
(w) Indebtedness caused by granting the Ratable Security of EMTNs; and
(zx) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yw) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Nielsen Holdings N.V.), Credit Agreement (Nielsen Holdings N.V.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, Indebtedness except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries arising under the Loan DocumentsDocuments (including any Incremental Facility or Refinancing Facility);
(b) Indebtedness outstanding on the date hereof and (other than any individual obligation with respect to such Indebtedness that is less than $2,000,000) listed on Schedule 7.03;
(c) any Permitted Refinancing Indebtedness of Indebtedness permitted under Section 7.03(b) or of Indebtedness subsequently incurred under this Section 7.03(c);
(d) Guarantees by the Borrowers Borrower or any Restricted Subsidiary in respect of Indebtedness otherwise permitted hereunder of the Senior Borrower or any Restricted Subsidiary;
(e) Indebtedness in respect of (i) Cash Management Obligations incurred in the ordinary course of business and (ii) Hedging Agreements incurred in the ordinary course of business and not for speculative purposes;
(i) Indebtedness of the Borrower and any Restricted Subsidiary owing to any Restricted Subsidiary and of any Restricted Subsidiary owing to the Borrower and (ii) Disqualified Equity Interests of a Restricted Subsidiary issued to the Borrower or another Restricted Subsidiary; provided that, (a) any such Indebtedness extended by a non-Loan Party to a Loan Party must be subordinated to the Secured Notes Obligations on customary terms and (b) Indebtedness of a non-Loan Party owing to a Loan Party pursuant to this Section 7.03(f) and any Disqualified Equity Interests of a non-Loan Party issued to a Loan Party, together with Investments in non-Loan Parties made pursuant to Section 7.02(j), shall not in the aggregate exceed the greater of $40,000,000 and 8% of Consolidated Net Tangible Assets; provided further, that notwithstanding the foregoing, any Indebtedness extended by any Loan Party to any non-Loan Party shall be permitted (and shall not be subject to the cap in the immediately preceding proviso) so long as such Indebtedness is evidenced by a promissory note, in form and substance reasonably satisfactory to the Administrative Agent, and such promissory note shall be pledged to the Collateral Agent as Collateral;
(g) Guarantees thereof by the Guarantors) Borrower or any Restricted Subsidiary of borrowings by current or former officers, managers, directors, employees or consultants in connection with the purchase of Equity Interests of the Borrower by any such person in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 1,000,000 at any one time outstanding;
(kh) Subject to an ABL Intercreditor Agreement, Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness ABL Facility in an aggregate principal amount not to exceed the greater of (x) $500,000,000 125,000,000 and (y) 30.025% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingNet Tangible Assets;
(vi) Indebtedness incurred to finance or assumed in connection with Permitted Acquisitions and other permitted Investments consisting of the purchase of a Permitted Acquisitionbusiness unit, line of business or a division of a Person or all or substantially all of the assets or all of the Capital Stock of another Person; provided that (i) that, after giving Pro Forma Effect effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated incurrence thereof on a Pro Forma Basis, (i) as of if such Indebtedness is (or is intended to be) secured by the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than Collateral on a pari passu basis, the Total First Lien Leverage Ratio immediately prior is equal to the consummation of such Permitted Acquisition or less than 2.00 to 1.00 and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtednesson a junior-lien basis or unsecured, the First Lien Senior Secured Total Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater equal to or less than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior 3.00 to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such 1.00; provided that Indebtedness incurred by any non-Loan Party pursuant to this clause (BSection 7.03(i) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not in the aggregate exceed the greater of (x) $400,000,000 40,000,000 and (y) 25.08% of Consolidated EBITDA Net Tangible Assets;
(j) Indebtedness incurred or assumed in connection with permitted Investments made pursuant to Section 7.02(m);
(k) Indebtedness of non-Loan Party Restricted Subsidiaries in an aggregate amount not to exceed $40,000,000;
(l) Indebtedness consisting of Capital Lease Obligations not to exceed $50,000,000 in the Parent Borrower for the most recently ended Test Period aggregate at any one time outstanding;
(m) additional Indebtedness of the Loan Parties in an amount not to exceed the greater of $75,000,000 and 15% of Consolidated Net Tangible Assets in the aggregate at any time outstanding;
(n) Indebtedness of the Borrower or any Restricted Subsidiary in connection with one or more standby or trade-related letters of credit, performance bonds, bid bonds, appeal bonds, bankers acceptances, insurance obligations, reclamation obligations, bank guarantees, surety bonds, completion guarantees or other similar bonds and obligations, including self-bonding arrangements, issued by the Borrower or a Restricted Subsidiary, in each case, in the ordinary course of business or pursuant to self-insurance obligations and not in connection with the borrowing of money or the obtaining of advances;
(o) Indebtedness arising from agreements of the Borrower or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with the acquisition or disposition of any business, assets or any Subsidiary;
(p) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(q) Indebtedness of the Borrower or any Restricted Subsidiary consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply or other arrangements;
(r) any transaction permitted under Section 7.12;
(s) Indebtedness under the Loan and Aircraft Security Agreement (S/N 560- 5802), dated as of July 26, 2016, among Bank of Utah, not in its individual capacity, but solely as owner trustee, as the borrower, Contura Energy Services, LLC, as the operator and Citizens Asset Finance, Inc., as the lender;
(t) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans“UMWA Note”) incurred by a Borrower pursuant to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect contingent seven-year 5.0% note in an aggregate principal amount of $8.75 million to be issued to the relevant Term Loans being refinancedUMWA on August 1, 2017, if, prior to such date, federal legislation providing retirement health benefits to the UMWA retirees has not been enacted, or if moneys under such legislation have not become available for such benefits, and (B) as the contingent seven-year 5.0% note in an aggregate principal amount of $8.75 million to be issued to the date of the incurrence of such IndebtednessUMWA on December 1, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced2017, (C) no Restricted Subsidiary is a borrower or guarantor with respect if, prior to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligationsdate, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered federal legislation providing retirement health benefits to the Administrative Agent a certificate of a Responsible Officer of UMWA retirees has not been enacted, or if moneys under such legislation have not become available for such benefits, in each case pursuant to that certain agreement to fund the Parent Borrower, together with all relevant financial information reasonably requested by VEBA between the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) Company and (D) and (ii) any Permitted Refinancing thereofUMWA;
(xu) Indebtedness with respect incurred pursuant to any Permitted Receivables Financingthe GUC Distribution Note in an amount not to exceed $5.5 million;
(yv) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 under the Reclamation Funding Agreement and any Permitted Refinancing thereofall required payments made thereunder; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only deemed to be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will Existing Senior Notes, which Indebtedness shall only be deemed permitted if the deposit of cash with the Existing Notes Trustee in accordance with the Existing Senior Notes Indenture, in connection with an irrevocable notice of repurchase or redemption in full issued on or before the Closing Date for repurchase or redemption to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception occur within 30 days as set forth in clause (c) of this Section 7.03. The accrual of interestthe Existing Senior Notes Indenture, has occurred on or prior the accretion of accreted value Closing Date and the payment of interest Existing Senior Notes have, in fact, been repaid in full within 30 days after the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03Closing Date.
Appears in 2 contracts
Sources: Credit Agreement (Contura Energy, Inc.), Credit Agreement (Contura Energy, Inc.)
Indebtedness. CreateNo Credit Party shall, and no Credit Party shall suffer or permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries under the Loan Documents (including pursuant to any amendment in respect of connection with an Incremental Facility, any Ratably Secured Existing NotesExtension or Extension Offer, any Permitted Repricing Amendment or any other amendment entered into from time to time in accordance with the terms hereof);
(iib) Surviving [Reserved];
(c) Indebtedness listed on Schedule 7.03(c5.3(c) and (iii) any Permitted Refinancing of any of the foregoingthereof;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d5.3(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.035.3); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.025.2; provided that all such Indebtedness of any Loan Credit Party owed to any Person that is not a Loan Credit Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyreasonably acceptable to Agent;
(f) (i) Attributable Indebtedness Capital Lease Obligations and other Indebtedness (including Capitalized Capital Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two one hundred seventy and eighty (270180) days after the applicable acquisition, construction, repair, replacement or improvement), and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses clause (i) and (ii); and provided further that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)Capital Lease Obligations) under this Section 7.03(f5.3(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period35,000,000 at any time outstanding;
(g) Indebtedness in respect of Swap Rate Contracts (i) entered into designed to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange against interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancecommodities pricing risks incurred not for speculative purposes;
(h) Guarantee Obligations Indebtedness assumed in connection with respect to, any Permitted Acquisition or Investment permitted under Section 5.2; provided that (i) such Indebtedness was not incurred in contemplation of such Permitted Acquisition or Investment and (ii) the assumption of, aggregate amount of such assumed Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)does not exceed $35,000,000 at any time outstanding;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course Ordinary Course of businessBusiness or approved by the board of directors or managers or sole member, as applicable, of the Borrower in their reasonable business judgment;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests Stock or Stock Equivalents of Holdings (or any direct or indirect parent thereof) the Borrower permitted by Section 7.06 5.6 in an aggregate principal amount not to exceed $20,000,000 5,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting (i) indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsadjustments or (ii) earn-out obligations, in the case of clause (ii), not in excess of an aggregate principal amount of $25,000,000 at any time outstanding; provided that, in each case, all such Indebtedness shall be unsecured and payable only to the extent permitted by Section 5.8(b);
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course Ordinary Course of businessBusiness;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course Ordinary Course of businessBusiness, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course Ordinary Course of business or consistent with past practiceBusiness;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Junior Indebtedness of incurred by the Parent Borrower or any of its Restricted Subsidiary Subsidiaries (including in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated connection with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Acquisitions and other similar Investments permitted under Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness5.2), so long as either (x1) on the Total Leverage Ratio date of incurrence of such Indebtedness, the Borrower shall be in compliance with the Financial Covenants (calculated on a Pro Forma Basis) as of the end of the most recent recently ended Test Period Period; provided that such Indebtedness may be incurred to finance an Acquisition notwithstanding the failure to comply with the applicable ratios if such Acquisition is not greater than 7.00:1.00 or (y) a Limited Condition Transaction and the Fixed Charge Coverage Ratio (calculated Borrower was in compliance with such ratios on a Pro Forma Basis) for Basis on the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)date that a legally binding commitment was entered into with respect to such Acquisition, (12) the final maturity date of such Indebtedness shall not mature prior to be no earlier (but may be later) than the date that is 91 ninety-one (91) days after the Maturity Date final maturity date of the then outstanding Term B Loans or and shall have a Weighted Average Life to Maturity less equal to or greater than the Weighted Average Life to Maturity of the Term B Loans Loans, plus 91 ninety- one (91) days, (23) to the extent such Junior Indebtedness is secured, such Indebtedness shall not be secured by any collateral other than the Collateral and shall be subject to customary intercreditor terms to be reasonably satisfactory to Agent and the Borrower, (4) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, guaranteed by any Person that is not a Guarantor and (35) the other terms and conditions of any such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by a Non-Loan Parties Credit Party, when taken together with any Indebtedness incurred pursuant to Section 5.3(s), shall not exceed the greater of (x) an aggregate principal amount not to exceed $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 20,000,000 at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Credit Party, and guarantees thereof by a Non-Loan Credit Party, in an aggregate principal amount not to exceed (Aexceed, when taken together with Indebtedness incurred by a Non-Credit Party pursuant to Section 5.3(r) above, $600,000,000 35,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriaoutstanding;
(it) Incremental Equivalent Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred and Guarantees thereof by the Borrowers Guarantors) to the extent permitted by and incurred in compliance with the applicable provisions of Section 1.1(e), provided that the Borrowers shall have been permitted to incur if such Incremental Equivalent Indebtedness pursuant tois secured, and such Indebtedness it shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable secured solely by Liens ranking junior to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms Liens on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso pursuant to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A5.1(y), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 50,000,000 at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (x);
(w) any Indebtedness constituting an Investment permitted under Section 5.2;
(x) obligations in respect of Disqualified Stock in an amount not to exceed $3,000,000 at any time outstanding which is subordinated to the Obligations as to right and time of payment and as to other rights and remedies thereunder and having such other terms as are, in each case, reasonably satisfactory to Agent; and
(y) aboveIndebtedness in connection with a judgment not constituting an Event of Default under Section 7.1(h). For purposes of determining compliance with this Section 7.03any restriction on the incurrence of Indebtedness, the principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03defeased. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.035.3.
Appears in 2 contracts
Sources: Credit Agreement (R1 RCM Inc.), Credit Agreement (R1 RCM Inc.)
Indebtedness. CreateNone of the Covenant Parties or any of their Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments or any refinancings thereof;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of Closing Date and listed on Schedule 7.03(b) to the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Existing Credit Agreement and any Permitted Refinancing thereofrefinancing thereof and, until the first Business Day following the Pushdown Date, the Outstanding Indebtedness and (ii) intercompany Indebtedness outstanding on the Closing Date evidenced by an Intercompany Note and any refinancing thereof evidenced by an Intercompany Note;
(c) (i) Indebtedness of the Parent Borrower Guarantees by any Covenant Party and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower any Covenant Party or any Restricted Subsidiary of a Covenant Party otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any Senior Subordinated Debt, Senior Unsecured Debt or Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower a Covenant Party or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, lease or improvement of a fixed or capital asset incurred by a Covenant Party or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) (i) entered into to hedge or mitigate risks to which the Parent Borrower Indebtedness of any Covenant Party or any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (v) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Debt Documentation as of the Pushdown Date, (w) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Covenant Parties and their Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the latest Maturity Date (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemption provisions satisfying the requirement of clause (y) hereof), (y) has actual or anticipated exposure terms and conditions (other than those in respect of shares of capital stock or other equity ownership interests interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Covenant Parties as the terms and conditions of the Parent Borrower Senior Subordinated Debt; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or any Subsidiary)drafts of the documentation relating thereto, stating that ▇▇▇▇▇▇▇ has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrowers within such five Business Day period that it disagrees with such determination (iiincluding a reasonable description of the basis upon which it disagrees) entered into in order to effectively cap, collar or exchange interest rates and (from fixed to floating rates, from one floating rate to another floating rate or otherwisez) with respect to any interest-bearing liability or investment of such Indebtedness described in the Parent Borrower or any Subsidiary and immediately preceding clause (iii) entered into to hedge commoditiesB), currencies, general economic conditions, raw materials prices, revenue streams or business performanceis incurred by a Loan Party;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (any Covenant Party or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by any Covenant Party or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (NHF or any direct or indirect parent thereof) of NHF permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent Disposition constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of any Covenant Party or any of its Restricted Subsidiaries, in an aggregate principal amount that at the ordinary coursetime of, and after giving effect to, the incurrence thereof, would not exceed $400,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness constituting the Senior Subordinated Debt and/or the Senior Unsecured Debt;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness of non-Guarantor Subsidiaries incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in the ordinary course of business on ordinary business terms in an aggregate principal amount outstanding not to exceed $75,000,000 at any time;
(t) Indebtedness of the Covenant Parties or the Restricted Subsidiaries (i) assumed in connection with any Permitted Acquisition or (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests of a Person and including, for the avoidance of doubt, the assets owned by such Person) and so long as both immediately prior and after giving effect thereto, (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks no Default shall exist or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loansresult therefrom, (B) as of the date of Company and the incurrence of such IndebtednessRestricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, and (C) the Weighted Average Life to Maturity aggregate principal amount of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such and all Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause paragraph (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereofdoes not exceed $200,000,000;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingconnection with a Permitted Receivables Financing;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofOffering;
(w) Indebtedness caused by granting the Ratable Security of EMTNs; and
(zx) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yw) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Nielsen Holdings B.V.), Credit Agreement (Nielsen CO B.V.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
Documents and (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount under this clause (ii) not to exceed $2,250,000,000 500,000,000 and any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and as listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (i) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee (other than Guarantees by a Foreign Subsidiary of Indebtedness of another Foreign Subsidiary) of any Senior Notes or any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (A) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Alight, Inc. /DE), Credit Agreement (Alight, Inc. / Delaware)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness outstanding on the Closing Date and listed in Section 7.03 of the Borrowers in respect of Confidential Disclosure Letter and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Closing Date and any Permitted Refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such Guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the subordination terms set forth in Section 3.01 of the GuarantyObligations pursuant to an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, constructionlease or improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $50,000,000 and 2.00% of Total Assets, repair, replacement or improvement), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation such Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against the Borrower’s or mitigate any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Restricted Subsidiary has actual or anticipated exposure assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided further that, after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (other x) $35,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long as the Total Leverage Ratio is no greater than those 5.85:1.00 and, if such Indebtedness is secured, the Secured Leverage Ratio is no greater than 4.00:1.00, in respect each case determined on a Pro Forma Basis; provided that in the case of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiaryclause (y), (ii) entered into any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s), does not exceed in order to effectively capthe aggregate at any time outstanding the greater of $50,000,000 and 2.00% of Total Assets, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment in each case determined at the time of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceincurrence;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $125,000,000 and 5.00% of Total Assets;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause the 2020 Notes and the 2021 Notes (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further thatincluding, in each case, any guarantees by the case of any Indebtedness incurred under this clause (r)Guarantors thereof) and, (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 daysin each case, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Prestige Brands Holdings, Inc.), Form 8 K
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in Closing Date and, with respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) to any such Indebtedness in an aggregate principal amount not to exceed in excess of $2,250,000,000 5,000,000, listed on Schedule 7.03(b) and any Permitted Refinancing thereofthereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or consistent with past practice or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee (other than Guarantees by a Foreign Subsidiary of Indebtedness of another Foreign Subsidiary) of any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all (x) any such Indebtedness of advanced by any Loan Party owed to any Person that is not a Loan Party shall either (i) be subject made in the ordinary course of business or consistent with past practice or (ii) be evidenced by an Intercompany Note and (y) any such Indebtedness advanced by any Person that is not a Loan Party to any Loan Party shall be subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing by a Loan Party to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provided otherwise);
(f) (ie) Attributable Indebtedness and other Indebtedness (including Capitalized Financing Leases) financing an acquisition, construction, repair, replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of fixed or capital assets the applicable asset in an aggregate amount not to exceed (provided that A) the amount of such Indebtedness is incurred concurrently outstanding on the Closing Date plus (B) the greater of (1) $30,000,000 and (2) 35.0% of LTM Consolidated EBITDA, in each case determined at the time of incurrence at any time outstanding (together with or within two hundred seventy any Permitted Refinancings thereof but without giving effect to any increase in principal amount permitted under clause (270a) days after of the applicable acquisition, construction, repair, replacement or improvementproviso to the definition of “Permitted Refinancing”), (ii) Attributable Indebtedness arising out of Permitted any Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period Lease-Back Transaction or lease lease-back transactions permitted by Section 7.05 and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which incurred in the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect ordinary course of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)not for speculative purposes;
(i) Indebtedness of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition or similar Investment expressly permitted hereunder; provided that after giving pro forma effect to such Permitted Acquisition or Investment and the incurrence or assumption of such Indebtedness, the aggregate principal amount of such Indebtedness does not exceed (x) the greater of (1) $30,000,000 and (2) 35.0% of LTM Consolidated EBITDA at any time outstanding plus (y) any additional amount of such Indebtedness so long (A) if such incurred Indebtedness is secured by the Collateral on a pari passu basis with the Facilities, either (1) the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated First Lien Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted First Lien Ratio Debt, (B) if such Indebtedness is secured by the Collateral on a junior lien basis to the Facilities, either (1) the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Secured Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted Junior Secured Ratio Debt or (C) if such Indebtedness is unsecured or not secured by all or any portion of the Collateral (and including all such Indebtedness of Restricted Subsidiaries that are not Loan Parties), either (1) (I) the Consolidated Interest Coverage Ratio determined on a Pro Forma Basis would be greater than or equal to the Consolidated Interest Coverage Ratio immediately prior thereto or (II) the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Total Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted Unsecured Ratio Debt; provided, that any Indebtedness incurred (but not assumed) pursuant to this clause (g)(i) shall be subject to the requirements included in the first proviso under the definition of “Permitted Ratio Debt” and (ii) any Permitted Refinancing thereof;
(h) Indebtedness representing deferred compensation or similar arrangements to employees any future, present or former employees, directors, officers, managers, members, partners, independent contractors or consultants of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of businessbusiness or consistent with past practice;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of the Restricted Subsidiaries to current future, present or former officers, directors, partners, managers, consultants members, independent contractors, consultants, directors and employees, their respective estatesControlled Investment Affiliates or Immediate Family Members, spouses or former spouses in each case, to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries prior to the Closing Date or thereafter in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation purchase price, earn-outs or other similar arrangements incurred by such Person prior to the Closing Date or thereafter in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate outstanding principal amount that at the time of, and immediately after giving effect to, the incurrence thereof, would not exceed (x) the greater of (i) $35,000,000 and (ii) 40.0% of LTM Consolidated EBITDA at any time outstanding plus (y) 200% of the sum of (without duplication) (A) the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests or the aggregate amount of contributions to the common capital (other than from a Restricted Subsidiary) of the Borrower received after the Closing Date (other than Excluded Contributions, the Equity Investment, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has been Not Otherwise Applied, plus (B) the Available RP Capacity Amount plus (C) the Cumulative Credit;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of businessbusiness or consistent with past practice;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created created, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, bid, appeal indemnity, appeal, judgment and surety other similar bonds or instruments and performance performance, bankers’ acceptance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) Indebtedness supported incurred (x) and secured by the Collateral on a Letter of Credit in pari passu basis with the Initial Term Loans (“Incremental Equivalent First Lien Debt”) or (y) and secured by the Collateral on a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of basis with the Parent Borrower or any Restricted Subsidiary Initial Term Loans (“Incremental Equivalent Junior Lien Debt”), in an aggregate principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to under this clause (A) (q), when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally Incremental Commitments incurred pursuant to this clause (ASection 2.14(d)(v) that are consummated in reliance on and Incremental Equivalent Unsecured Debt incurred pursuant to Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness7.03(w), not to exceed the Available Incremental Amount, so long as either (x) if the Total Leverage Ratio proceeds of such Indebtedness are being used to finance a Permitted Acquisition, Investment, or Limited Condition Transaction, no Event of Default under Sections 8.01(a) or (calculated on a Pro Forma Basisf) as of with respect to the end of the most recent Test Period is not greater than 7.00:1.00 Borrower shall have occurred and be continuing or would exist after giving effect to such Indebtedness, or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end if otherwise, no Event of the most recent Test Period is not less than 2.00:1.00Default shall have occurred and be continuing or would exist after giving effect to such Indebtedness; provided further that, that such Indebtedness shall (A) in the case of any Indebtedness incurred under this clause (r)Incremental Equivalent First Lien Debt secured on pari passu basis with the Liens securing the Initial Term Loans, (1) such Indebtedness shall not mature prior to the have a maturity date that is after the Latest Maturity Date of the Initial Term Loans at the time such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least 91 days after the Latest Maturity Date of the Initial Term B Loans or at the time such Indebtedness is incurred (and in each case subject to the Permitted Earlier Maturity Indebtedness Exception), (B) in the case of Incremental Equivalent First Lien Debt, have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysFacilities and, in the case of Incremental Equivalent Junior Lien Debt, shall not be subject to scheduled amortization prior to maturity (and in each case subject to the Permitted Earlier Maturity Indebtedness Exception), (2C) if such Indebtedness shall not have mandatory prepayment, redemption or offer is secured on a junior lien basis by a Loan Party with respect to purchase events more onerous than those applicable Collateral to the Lien securing the Initial Term B Loans, be subject to a Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Initial Term Loans, be subject to a First Lien Intercreditor Agreement, (3D) in the other case of Incremental Equivalent First Lien Debt in the form of term loans, shall be subject to the MFN Protection as if such Indebtedness were an Incremental Term Loan incurred in reliance on the Incurrence-Based Incremental Amount (but subject in all respects to the exclusions set forth in the MFN Protection) and (E) have terms and conditions that are otherwise as agreed between the Borrower and the lender, holder or other provider of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Legence Corp.), Credit Agreement (Legence Corp.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) ABL Credit Agreement in an aggregate principal amount not to exceed $2,250,000,000 475,000,000, (iii) the Dollar Senior Notes Documents in an aggregate principal amount not to exceed $1,040,000,000 and (iv) the Euro Senior Notes Documents in an aggregate principal amount not to exceed €235,000,000 and, in the case of clause (ii), (iii) and (iv), any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder hereunder; provided that (except that an Immaterial A) no Guarantee (other than Guarantees by a Foreign Subsidiary may notof Indebtedness of another Foreign Subsidiary) of any Senior Notes, by virtue of this Section 7.03(d), the ABL Credit Agreement (other than Canadian Subsidiaries which guarantee Indebtedness that under the ABL Credit Agreement) or any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such Immaterial Subsidiary could not otherwise incur under this Section 7.03); guaranteeing party shall have also provided that, a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Gates Industrial Corp PLC), Credit Agreement (Gates Industrial Corp PLC)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness of (i) outstanding on the Borrowers Original Closing Date and listed in respect of the Senior Secured Notes (and Guarantees thereof by the GuarantorsSchedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 hereto and any Permitted Refinancing refinancing thereof and (ii) intercompany Indebtedness outstanding on the Original Closing Date and any refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the subordination terms set forth in Section 3.01 of the GuarantyObligations pursuant to an Intercompany Note;
(f) (ie) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, construction, repair, replacement lease or improvement), (ii) Attributable Indebtedness arising out improvement of the applicable asset and any Permitted Sale Leasebacks Refinancing thereof in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 50,000,000 and (y) 6.01.75% of Consolidated EBITDA Total Assets, in each case determined at the time of the Parent Borrower for the most recently ended Test Period incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation such Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against the Borrower’s or mitigate any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Restricted Subsidiary has actual or anticipated exposure assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided further that, after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (other x) $50,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long as the Total Leverage Ratio is no greater than those 5.50:1.00 and, if such Indebtedness is secured, the Secured Leverage Ratio is no greater than 3.75:1.00, in respect each case determined on a Pro Forma Basis; provided that in the case of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiaryclause (y), (ii) entered into any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s), does not exceed in order to effectively capthe aggregate at any time outstanding the greater of $50,000,000 and 1.75% of Total Assets, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment in each case determined at the time of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceincurrence;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $100,000,000 and 3.75% of Total Assets; provided that the aggregate principal amount of Indebtedness outstanding in reliance on this clause (m) in respect of which the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan Party shall not exceed in the aggregate at any time outstanding the greater of $50,000,000 and 1.75% of Total Assets, in each case incurred in determined at the ordinary coursetime of incurrence;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness in respect of the (x) Unsecured High Yield Notes (including any guarantees by the Guarantors thereof) and Permitted Refinancing thereof and (y) Secured High Yield Notes (including any guarantees by the Guarantors thereof) and Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(st) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Non-Loan PartyForeign Subsidiary which, and guarantees thereof by Non-Loan Party, in an aggregate when aggregated with the principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the all other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”u) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount then outstanding, does not to exceed the greater of (x) $500,000,000 50,000,000 and (y) 30.010.0% of Consolidated EBITDA Total Assets (excluding, solely when calculating Total Assets for purposes of this Section 7.3(u), the Parent Borrower for assets of any Person that is not a Foreign Subsidiary), in each case determined at the most recently ended Test Period at any one time outstandingof incurrence;
(v) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to finance the Borrower or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as any of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofSubsidiaries; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yv) above. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 2 contracts
Sources: Credit Agreement (APX Group Holdings, Inc.), Credit Agreement (APX Group Holdings, Inc.)
Indebtedness. CreateDirectly or indirectly, create, incur, assume or suffer to exist any Indebtedness, in the case of the Company, issue any shares of Disqualified Stock or, in the case of any Restricted Subsidiary, issue any shares of Disqualified Stock, Series A Convertible Preferred Stock or preferred stock, except:
(a) Indebtedness of under this Agreement and the Parent Borrower other Loan Documents and any of its Subsidiaries under the Loan DocumentsCredit Agreement Refinancing Indebtedness incurred to refinance (in whole or in part) such Indebtedness;
(b) Contribution Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofIndebtedness incurred to refinance such Indebtedness;
(c) Indebtedness (including, without limitation, credit lines) outstanding on the Closing Date and listed on Schedule 8.02 and any Permitted Refinancing Indebtedness incurred to refinance such Indebtedness;
(d) Indebtedness consisting of Guarantees of the Company or any Restricted Subsidiary with respect to:
(i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower Company or any Restricted Subsidiary otherwise to the extent that such Indebtedness is permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of to be incurred pursuant to this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under 8.02 (other than this Section 7.038.02(d)); provided that, if and
(ii) Indebtedness not to exceed $20,000,000 in the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee aggregate consisting of Guarantees in favor of customers of the Obligations on terms at least as favorable Company, the Restricted Subsidiaries or joint ventures to which the Lenders as those contained in the subordination of such IndebtednessCompany or a Restricted Subsidiary is a party;
(e) Indebtedness of intercompany loans
(i) between the Parent Borrower or Loan Parties,
(ii) from an Immaterial Subsidiary to a Loan Party so long as the payee with respect to such intercompany loans is Solvent both before and after giving effect thereto,
(iii) from any Restricted Subsidiary owing Loan Party to the Parent Borrower or any other Restricted Subsidiary an Immaterial Subsidiary, to the extent constituting an Investment such loans are permitted by Section 7.02; provided under clause (b) of the definition of “Permitted Investments”,
(iv) between Restricted Subsidiaries that all such Indebtedness of any are not Loan Party owed to any Person Parties,
(v) from a Restricted Subsidiary that is not a Loan Party shall be subject to a Loan Party, to the subordination terms set forth in Section 3.01 extent such loans are permitted under clause (b) of the Guaranty;definition of “Permitted Investments” and
(vi) from a Loan Party to a Restricted Subsidiary that is not a Loan Party, to the extent such loans are permitted under clause (b) of the definition of “Permitted Investments”,
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out consisting of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodSwap Obligations;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge capital lease obligations, mortgage financings, industrial revenue bonds or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangementsmoney obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of design, development, construction or improvement of property, plant or equipment used in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower Company or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan PartySubsidiary, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional amount, including all Permitted Refinancing Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks refund, refinance or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such replace any Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount Section 8.02(g), not to exceed the greater of (x) $500,000,000 50,000,000 and (y) 30.015.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; outstanding and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Azz Inc), Credit Agreement (Azz Inc)
Indebtedness. CreateThe Borrower will not, incurnor will it permit any of its Restricted Subsidiaries to, assume create, incur or suffer to exist any Indebtedness, except:
(a) the Obligations and (i) any Credit Agreement Refinancing Indebtedness and (ii) Indebtedness incurred under the ABL Documents in an aggregate amount not to exceed the aggregate amount of (A) $3,000,000,000, (B) any incremental commitments permitted to be incurred pursuant to Section 2.22 or Section 2.25 of the Parent Borrower ABL Credit Agreement in substantially the form attached as Exhibit O (whether incurred as incremental commitments or otherwise) and (C) any Canadian revolving commitments incurred pursuant to Section 2.24 of its Subsidiaries the ABL Credit Agreement in substantially the form attached as Exhibit O (including any Permitted Refinancing Indebtedness in respect of the Indebtedness under the Loan ABL Documents, to the extent permitted under the ABL Intercreditor Agreement);
(b) Indebtedness of Staples and its Restricted Subsidiaries (giving pro forma effect to the Borrowers Transactions) existing on the Closing Date (and the Acquisition Effective Date to the extent Schedule 6.01 is updated pursuant to Section 1.07 hereof) and set forth on Schedule 6.01, and Permitted Refinancing Indebtedness in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or Staples owing to any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may notSubsidiary, by virtue and of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower Staples or any other Restricted Subsidiary Subsidiary, to the extent constituting an Investment permitted by Section 7.026.04(c) or set forth on Schedule 6.04; provided that (i) all such Indebtedness owed to a Loan Party shall be evidenced by a promissory note that is pledged to the Collateral Agent in accordance with the terms of the Guarantee and Collateral Agreement and (ii) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject subordinated to the Obligations pursuant to the Subordinated Intercompany Note or other subordination terms set forth in Section 3.01 or similar agreement reasonably acceptable to the Administrative Agent (it being understood that payments or prepayments of the Guarantysuch Indebtedness shall be permitted if, immediately prior to or after giving effect to such payments or prepayments, an Event of Default has not occurred);
(fd) Guarantees by the Borrower of Indebtedness of any Restricted Subsidiary and by any Restricted Subsidiary of Indebtedness of the Borrower or any other Restricted Subsidiary, provided that (i) Attributable the Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement so Guaranteed is permitted to be incurred by Staples or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)Restricted Subsidiary by this Section 6.01, (ii) Attributable Guarantees by any Loan Party of Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided Restricted Subsidiary that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does is not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case a Loan Party shall be permitted solely to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”6.04(c) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to Guarantees permitted under this clause (vd) and Section 7.03(r) by Non-Loan Parties shall not exceed be subordinated to the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA Obligations of the Parent Borrower for or the most recently ended Test Period at any one time outstanding;
(i) applicable Restricted Subsidiary if, and on the same terms as, the Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or so Guaranteed is subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Term Loan Credit Agreement, Term Loan Credit Agreement (Staples Inc)
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantorsdate hereof set forth on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the date hereof; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by Holdings, the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d7.03(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (ii) any Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by such Loan Party in such Restricted Subsidiary under Section 7.02(c);
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the GuarantyIntercompany Subordination Agreement;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), improvement and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks sale-leaseback transactions, and, in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) each case, any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)thereof; provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness at any one time outstanding incurred pursuant to this clause (ii)e) under this Section 7.03(f) does shall not exceed the greater of (x) $350,000,000 50,000,000 and (y) 20.01.75% of Consolidated EBITDA Total Assets, in each case determined at the time of the Parent Borrower for the most recently ended Test Periodincurrence;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness (i) entered into of any Person that becomes a Restricted Subsidiary after the date hereof, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to hedge the Borrower, Holdings or mitigate risks to which any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the Parent date such Person becomes a Restricted Subsidiary after the date hereof) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 7.01(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary has actual incurred or anticipated exposure assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 7.01(p) (other than those in respect of shares of capital stock or other equity ownership interests and any Permitted Refinancing of the Parent Borrower or foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Subsidiary), Permitted Refinancing thereof at any time outstanding pursuant to clause (iig)(ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancedoes not exceed $50,000,000;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)Term Loan Refinancing Debt;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(k) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Original Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(n) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $100,000,000 and 3.25% of Total Assets, in each case determined at the time of incurrence; provided that a maximum of the greater of $25,000,000 and 1.00% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties, in each case determined at the time of incurrence;
(o) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) Indebtedness supported by a Letter of Credit in a an aggregate principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 375,000,000 at any one time outstanding under the ABL Facilities and (ii) the amount of obligations in respect of any Secured Hedge Agreement and any Secured Cash Management Agreement (in each case, as defined in the ABL Credit Agreement) at any time outstanding and not incurred in violation of Section 7.03(f) and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(s) [Reserved];
(t) Indebtedness incurred by a Non-Loan PartyForeign Subsidiary which, and guarantees thereof by Non-Loan Party, in an aggregate when aggregated with the principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the all other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “and then outstanding, does not exceed $25,000,000;
(u) Permitted Alternative Incremental Facilities Debt”) Ratio Debt and (ii) any Permitted Refinancing thereof;
(uv) additional Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of the Restricted Subsidiaries;
(w) Indebtedness in an aggregate principal amount not respect of letters of credit issued for the account of any of the Subsidiaries of Holdings to exceed finance the greater purchase of inventory so long as (x) $500,000,000 such Indebtedness is unsecured and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of such Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall does not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 50,000,000 at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereoftime;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect the case of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofHoldings, Qualified Holding Company Debt; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums and other costs and expenses incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness incurred pursuant to the ABL Facilities (and any Permitted Refinancing thereof) may only be incurred pursuant to Section 7.03(r).
Appears in 2 contracts
Sources: Credit Agreement (Chinos Holdings, Inc.), Credit Agreement (J Crew Group Inc)
Indebtedness. Create, incurIncur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments (including any Incremental Term Loans, any Incremental Revolving Credit Commitments, and any Extended Term Loans);
(b) Indebtedness outstanding on the Closing Date and either (1) listed on Schedule 7.03(b) or (2) not in excess of (x) $2,500,000 in the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof (other than intercompany Indebtedness permitted under Section 7.03(d));
(c) (i) Indebtedness of the Parent Borrower Guarantees by any Loan Party and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower a Loan Party or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial other than any Guarantee by a Loan Party of any Indebtedness of a Foreign Subsidiary may not, by virtue of this permitted under Section 7.03(d7.03(u), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided thatthat (A) no Guarantee of any Incremental Equivalent Debt, or Permitted Refinancing thereof shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower any Loan Party or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the subordination terms set forth in Section 3.01 of the GuarantyObligations pursuant to an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized LeasesLeases and Mortgages) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset or real property incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement asset or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks property in an aggregate principal amount outstanding not to exceed at any one time outstanding the greater of (x) $100,000,000 15,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iiiii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which against the Parent Borrower Borrower’s or any Subsidiary has actual or anticipated Restricted Subsidiary’s exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwisecommodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance[Reserved];
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower Loan Parties (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Loan Parties or any of the Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) company permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any DispositionDisposition permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsincluding, to the extent constituting Indebtedness, earnouts, holdbacks and deferred or contingent purchase price) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and a Permitted Acquisitions Change of Control Event, a Permitted Acquisition or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business;
(m) Indebtedness of any Loan Party or any of its Restricted Subsidiaries in an aggregate amount not to exceed $15,000,000 (and Permitted Refinancings thereof); provided, the aggregate amount of Indebtedness outstanding incurred pursuant to this clause (m) by a Restricted Subsidiary which is not a Loan Party shall not exceed the Non-Guarantor Debt Cap;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take- or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Incremental Equivalent Debt;
(r) Indebtedness supported by a Letter letter of Credit credit, in a an aggregate principal amount not to exceed the face amount of such Letter letter of Creditcredit;
(rs) [reserved];
(it) other unsecured or junior lien [reserved];
(u) Indebtedness of the Parent Borrower or any Restricted Subsidiary Subsidiaries which are not Guarantors (and Permitted Refinancings thereof) in an aggregate amount not to exceed (A) $1,000,000,000 at 15,000,000; provided that such Indebtedness is non-recourse to, and is not Guaranteed by, any Loan Party; provided, further, the time of any incurrence pursuant to this clause (A) (when aggregated with the aggregate amount of Permitted Refinancings in respect of Indebtedness originally outstanding incurred pursuant to this clause (Au) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater Non-Guarantor Debt Cap;
(v) Indebtedness consisting of obligations owing under any customer or supplier incentive, supply, license or similar agreements entered into in the ordinary course of business;
(w) [reserved];
(x) $400,000,000 and [reserved];
(y) 25.0% Guarantees of Consolidated EBITDA Indebtedness of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, joint ventures in an aggregate principal amount at any time not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions3,000,000; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtednessprovided, the Weighted Average Life to Maturity aggregate amount of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (ty) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereofby a Restricted Subsidiary which is not a Loan Party shall not exceed the Non-Guarantor Debt Cap;
(uz) additional Indebtedness in an aggregate principal amount not to exceed Disqualified Equity Interests issued after the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted AcquisitionClosing Date, provided that Restricted Payments (iother than payments in Qualified Equity Interests) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation in respect of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred Disqualified Equity Interests issued pursuant to this clause (Bz) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or are subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the on terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only reasonably acceptable to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereofwhich shall permit Restricted Payments in respect of such Disqualified Equity Interests to the extent permitted by Section 7.06;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(zaa) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Nebula Parent Corp.), Credit Agreement (Nebula Parent Corp.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness The Senior Notes (including any guarantees thereof by the Subsidiary Guarantors) issued on the Closing Date in an aggregate principal amount of $625,000,000, the exchange notes and related exchange guarantees to be issued by the Subsidiary Guarantors in exchange for such Senior Notes pursuant to the registration rights agreement entered into in connection with the issuance of such Senior Notes, and any Permitted Refinancing of the Parent Borrower and any of its Subsidiaries under the Loan Documentsforegoing;
(b) Indebtedness of the Borrowers Loan Parties under the Loan Documents;
(c) Indebtedness of DBI and its Subsidiaries outstanding on the date hereof and listed in respect Section 7.03(c) of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Confidential Disclosure Letter and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of Guarantees by the Parent Borrower and its or any Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any such Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, and to the extent permitted by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)7.02; provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the applicable Guaranty to the extent required by Section 6.12 and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination provisions of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an such Investment is permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person Subsidiary that is not a Loan Party shall must be subject expressly subordinated to the subordination terms set forth in Section 3.01 Obligations of the Guarantysuch Loan Party;
(f) (i) Attributable Indebtedness and other Indebtedness purchase money obligations (including Capitalized Leasesobligations in respect of mortgage, industrial revenue bond, industrial development bond, and similar financings) financing to finance the acquisitionpurchase, construction, repair, replacement repair or improvement of fixed or capital assets (within the limitations set forth in Section 7.01(i) and any Permitted Refinancing thereof; provided that the aggregate amount of all such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does shall not exceed the greater of (xA) $350,000,000 65,000,000 and (yB) 20.02.0% of Consolidated EBITDA Total Assets as of the Parent Borrower for end of the most recently ended Test Period;
(g) Indebtedness of Restricted Subsidiaries that are not Loan Parties in an aggregate principal amount at any time outstanding for all such Persons taken together not exceeding the greater of (A) $65,000,000 and (B) 2.00% of Total Assets as of the end of the Test Period;
(h) Indebtedness in respect of Swap Contracts not incurred for speculative purposes;
(i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure Indebtedness (other than those for borrowed money) subject to Liens permitted under Section 7.01;
(j) (i) Indebtedness (not constituting Disqualified Equity Interests) assumed in respect connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of shares of capital stock or other equity ownership interests of the Parent Borrower or such Permitted Acquisition; provided that both immediately prior and after giving effect to any SubsidiaryIndebtedness incurred pursuant to this clause (j)(i), (iix) entered into in order to effectively capno Event of Default shall exist or result therefrom, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iiiy) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted SubsidiariesSubsidiaries shall be in Pro Forma Compliance with the covenants set forth in Section 7.10 and the Borrower’s Total Leverage Ratio shall be no greater than the greater of (1) 6.50 to 1.0 as of the end of the Test Period last ended, in each case after giving effect to such Permitted Acquisition and the assumption, incurrence or issuance of such Indebtedness and (2) the Total Leverage Ratio immediately prior to the extent permitted by Section 7.02(y)consummation of such Permitted Acquisition and (ii) any Permitted Refinancing thereof;
(ik) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsSubsidiary;
(l) Indebtedness constituting obligations for indemnification, the adjustment of the purchase price or similar adjustments incurred under agreements for a Permitted Acquisition or Disposition;
(m) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderAcquisitions;
(mn) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseconnection with cash management and deposit accounts;
(no) Indebtedness in an aggregate principal amount not to exceed the greater of (A) $100,000,000 and (B) 3.25% of Total Assets as of the end of the Test Period at any time outstanding;
(p) Indebtedness consisting of (aA) the financing of insurance premiums or (bB) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(oq) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in Subsidiary constituting reimbursement obligations with respect of to letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments credit issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within thirty (30) days following such drawing or incurrence;
(pr) obligations in respect of performancesurety, bidstay, customs and appeal and surety bonds, performance bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments credit related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at Permitted Unsecured Indebtedness to the extent the Net Cash Proceeds of such Permitted Unsecured Indebtedness are utilized within ninety (90) days of the incurrence thereof to finance a Permitted Acquisition (or if not so utilized within such time period, solely to the extent the Net Cash Proceeds of any incurrence such Permitted Unsecured Indebtedness are applied to prepay Term Loans pursuant to this clause (ASection 2.05(b)(iv)) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus and (B) unlimited additional unsecured or junior lien IndebtednessIndebtedness owed to the seller of any property acquired in a Permitted Acquisition, so long as either (x) the Borrower shall be in Pro Forma Compliance with the covenants set forth in Section 7.10, (y) if the aggregate amount of Permitted Unsecured Indebtedness incurred pursuant to clause (s)(i)(A) and (s)(i)(B) exceeds $50,000,000, the Borrower’s Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not shall be no greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end greater of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) 6.50 to 1.0 after giving effect to such Indebtedness shall not mature prior to Permitted Acquisition and the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 daysassumption, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence (z) no Event of Default shall have occurred and be continuing or assumption of such Indebtednesswould result therefrom, (ii) if Permitted Second Lien Indebtedness to the extent the Net Cash Proceeds of such Indebtedness is secured by are utilized within ninety (90) days of the incurrence thereof to finance a Permitted Acquisition (or if not so utilized within such time period, solely to the extent the Net Cash Proceeds of such Permitted Second Lien on Indebtedness are applied to prepay Term Loans pursuant to Section 2.05(b)(iv)), so long as (x) the Collateral that is pari passu Borrower shall be in Pro Forma Compliance with the Lien securing the Obligationscovenants set forth in Section 7.10, (Ay) the Senior Secured Leverage Ratio shall be no greater than the greater of (1) 4.0 to 1.0 as of the end of the Test Period then last ended, after giving Pro Forma Effect effect to such Permitted Acquisition and the assumption, incurrence or issuance of such secured Indebtedness, Indebtedness and (2) the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence (z) no Event of Default shall have occurred and be continuing or assumption of such Indebtedness would result therefrom, and (Biii) if such Indebtedness is a term loan facility any Permitted Refinancing of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (Bi) being referred to or (ii) hereof meeting the requirements of Permitted Unsecured Indebtedness or Permitted Second Lien Indebtedness, as “Permitted Credit Facilities Acquisition Debt”applicable;
(t) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater in respect of (x) $400,000,000 and any bankers’ acceptance, letter of credit, warehouse receipt or similar facilities entered into in the ordinary course of business or (y) 25.0% any letter of Consolidated EBITDA credit issued in favor of the Parent Borrower for L/C Issuer or the most recently ended Test Period at Swing Line Lender to support any one time outstandingDefaulting Lender’s participation in Letters of Credit or Swing Line Loans, respectively, as contemplated by Section 2.03(a)(ii)(E) or 2.04(b), respectively;
(u) Indebtedness to current or former officers, directors, managers, consultants and employees, their Controlled Investment Affiliates or Immediate Family Members to finance the purchase or redemption of Equity Interests (other than Disqualified Equity Interests) of the Borrower (or any direct or indirect parent thereof) permitted by Section 7.06;
(v) (i) Permitted Subordinated Indebtedness (in to finance any prepayments of Indebtedness under the form of senior secured, senior unsecured, senior subordinated, Loan Documents pursuant to Section 2.05(b)(iv) or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D10.07(l) and (ii) any Permitted Refinancing thereofthereof meeting the requirements of Permitted Subordinated Indebtedness;
(w) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (w);
(y) above. For purposes Guarantees by the Borrower or any Restricted Subsidiary of determining compliance with this Section 7.03, obligations of franchisees or any of their Affiliates in an aggregate outstanding amount not to exceed the event that an item greater of Indebtedness meets the criteria (A) $30,000,000 and (B) 1.0% of more than one Total Assets as of the categories end of Indebtedness described in clauses (a) through the Test Period at any time outstanding;
(z) abovethe Subordinated Note; and
(aa) Permitted Unsecured Refinancing Debt, the Parent Borrower shallPermitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt, in its sole discretion, classify and reclassify each case of a Loan Party. Accrual of interest or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interestdividends, the accretion of accreted value value, the accretion or amortization of original issue discount, and the payment of interest or dividends in the form of additional Indebtedness shall in each case not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Dunkin' Brands Group, Inc.), Credit Agreement (Dunkin' Brands Group, Inc.)
Indebtedness. Create(a) Neither Holdings nor the Borrower will, nor will they permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(ai) (x) Indebtedness of the Parent Borrower and any of its Subsidiaries created under the Loan Documents;Documents and (y) Indebtedness owing to Select Medical Holdings or its subsidiaries incurred in connection with the Transactions,
(bii) Indebtedness of the Borrowers in respect of the Senior Secured New Unsecured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;,
(ciii) Indebtedness existing on the Closing Date not to exceed $2,500,000 and other Indebtedness existing on the Closing Date set forth in Schedule 6.01 and, in each case, any Permitted Refinancing thereof,
(iiv) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or Holdings owed to any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue and of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing owed to the Parent Borrower Holdings or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02Subsidiary; provided that all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Non-Loan Party shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent and Indebtedness of any Restricted Subsidiary that is a Non-Loan Party owed to any Loan Party shall be subject to the subordination terms cap set forth in Section 3.01 of 6.04(d); provided, further, that Indebtedness owed to any Captive Insurance Subsidiary shall only be subordinated to the Guaranty;extent permitted by applicable laws or regulations,
(fv) Guarantees by Holdings of Indebtedness of any Restricted Subsidiary and by any Restricted Subsidiary of Indebtedness of Holdings or any other Restricted Subsidiary; provided that (iA) Attributable the Indebtedness so Guaranteed is permitted by this Section 6.01, (B) Guarantees permitted under this clause (v) shall be subordinated to the Obligations of Holdings or the applicable Restricted Subsidiary to the same extent and on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations and (C) except in the case of Foreign Subsidiaries that provide Guarantees of Indebtedness of other Foreign Subsidiaries, no Restricted Subsidiary shall Guarantee any Indebtedness unless it is a Subsidiary Loan Party,
(vi) Indebtedness (including Capitalized LeasesAttributable Indebtedness) financing of Holdings or any Restricted Subsidiary incurred to finance the acquisition, construction, repair, replacement construction or improvement of any fixed or capital assets, including Capital Lease Obligations, and any Indebtedness assumed by Holdings or any Restricted Subsidiary in connection with the acquisition of any such assets (or secured by a Lien on any such assets prior to the acquisition thereof, and Permitted Refinancings thereof; provided that (A) such Indebtedness (other than Permitted Refinancings) is incurred concurrently with prior to or within two hundred seventy (270) 180 days after such acquisition or the applicable acquisition, construction, repair, replacement completion of such construction or improvement), improvement and (iiB) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an the aggregate principal amount of Indebtedness permitted by this clause (vi) shall not to (except as permitted by the definition of “Permitted Refinancing”) exceed at any one time outstanding the greater of (x) $100,000,000 87,500,000 and (y) 6.0and 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period as of the time of incurrence,
(vii) (x) Indebtedness of Holdings or any Restricted Subsidiary assumed in connection with any Permitted Acquisition and not created in contemplation thereof or (y) Permitted Debt incurred to finance a Permitted Acquisition; provided that after giving Pro Forma Effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness incurred or assumed pursuant to this clause (vii):
(A) if such Indebtedness ranks pari passu in right of security with the Obligations, the First Lien Net Leverage Ratio does not exceed 5.00:1.00,
(B) if such Indebtedness ranks junior in right of security with the Obligations, the Secured Net Leverage Ratio does not exceed 6.00:1.00, or
(C) if such Indebtedness is unsecured, either (x) the Total Net Leverage Ratio does not exceed 6.50:1.00 or (y) the Fixed Charge Coverage Ratio is not less than 2.00:1.00, and in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis and, in the case of clauses (x) and (iiiy) of this clause (vii), any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)such Indebtedness; provided that any such Indebtedness of a Non-Loan Party does not exceed in the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtednessat any time outstanding, but excluding Attributable together with any Indebtedness incurred by a Non-Loan Party pursuant to clause (ii)xvi) under of this Section 7.03(f) does not exceed 6.01, the greater of (x) $350,000,000 70,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)determined at such time of incurrence;
(iviii) Indebtedness representing deferred compensation owed to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price Person (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankerscredit for the benefit of such Person) providing workers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claimscompensation, health, disability or other employee benefits or property, casualty or liability insurance pursuant to reimbursement or self-insurance or other Indebtedness with respect indemnification obligations to reimbursement-type obligations regarding workers compensation claims;such Person, in each case incurred in the ordinary course of business,
(pix) obligations Indebtedness of Holdings or any Restricted Subsidiary in respect of performanceperformance bonds, bidbid bonds, appeal and bonds, surety bonds and bonds, performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretoobligations, in each case provided in the ordinary course of business or consistent with past practice;business,
(qx) Indebtedness supported of any Loan Party pursuant to Swap Agreements permitted by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;Section 6.07,
(rxi) (i) with respect to Holdings, Qualified Holdings Discount Debt; provided that, other unsecured or junior lien Indebtedness than with respect to any additional principal amounts resulting from the accrual of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed pay-in-kind interest, (A) $1,000,000,000 at such Indebtedness may only be issued or incurred to the time extent that after giving effect to the incurrence of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of such additional Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis, the Total Net Leverage Ratio does not exceed 6.00 to 1.00 and (B) as no Default has occurred and is continuing or would result therefrom,
(xii) Indebtedness representing deferred compensation to employees of Holdings and the end Restricted Subsidiaries incurred in the ordinary course of business,
(xiii) Indebtedness in respect of promissory notes issued to physicians, consultants, employees or directors or former employees, consultants or directors in connection with repurchases of Equity Interests permitted by Section 6.08(a)(iii),
(xiv) Indebtedness of any Foreign Subsidiary or any Non-Loan Party, collectively, in an amount not to exceed, together with any Indebtedness incurred by a Non-Loan Party pursuant to clause (vii) of this Section 6.01, $87,500,000 at any time outstanding,
(xv) Refinancing Debt Securities, the most recent Test Period Net Proceeds of which are applied to prepay Term Loans in connection with Section 2.11 and any Permitted Refinancing thereof,
(xvi) (a) Permitted Debt, provided that (i) (x) if such Indebtedness is secured by Liens ranking pari passu with the Liens securing the Obligations, the First Lien Net Leverage Ratio does not greater than 7.00:1.00 exceed 5.00:1.00, (y) if such Indebtedness is secured by Liens ranking junior to the Liens securing the Obligations, the Secured Net Leverage Ratio does not exceed 6.00:1.00, and (z) if such Indebtedness is unsecured, either (1) the Total Net Leverage Ratio does not exceed 6.50:1.00 or (y2) the Fixed Charge Coverage Ratio is not less than 2.00:1.00, in each case, determined on a Pro Forma Basis after giving effect to such assumption or incurrence and the use of proceeds thereof; and any Permitted Refinancing thereof and (calculated ii) in each case, subject to compliance with the Financial Covenant on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4b) the maximum other Permitted Debt in an aggregate principal amount of Indebtedness that may be incurred pursuant to this clause subclause (rb), when aggregated with the Free and Clear Usage Amount at such time, not to exceed the sum of (i) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0100.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and plus (ii) the principal amount of any voluntary prepayments of Term Loans or Revolving Loans, to the extent accompanied by a permanent reduction in the Revolving Commitments, and any Permitted Refinancing thereof;,
(sxvii) the incurrence by Holdings or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is extinguished within five (5) Business Days,
(xviii) the incurrence of Indebtedness arising from agreements of Holdings or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, holdback, contingency payment obligations or similar obligations, in each case, incurred or assumed in connection with the disposition or acquisition of any business, assets or capital stock of Holdings or any Restricted Subsidiary,
(xix) the incurrence of Indebtedness resulting from endorsements of negotiable instruments for collection in the ordinary course of business,
(xx) Indebtedness incurred by of Holdings or a Non-Loan PartyRestricted Subsidiary in respect of netting services, overdraft protection and guarantees thereof by Non-Loan Party, otherwise in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutionsconnection with deposit accounts; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base remains outstanding for 10 Business Days or similar advance rate criteria;less,
(ixxi) Indebtedness (in the form amount of senior secured, senior unsecured, senior subordinated, Net Proceeds actually received by Holdings from the issuance by Holdings of any Equity Interests (or subordinated notes capital contribution in respect thereof) after the Closing Date other than pursuant to the Cure Right or loans) incurred by proceeds received in connection with the Borrowers Initial Public Offering or to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant toOtherwise Applied, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that and
(Axxii) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence or issuance by Holdings or any of such Indebtedness, the Weighted Average Life to Maturity its Restricted Subsidiaries of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 300,000,000 and (y) 30.075.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one the time outstanding;of incurrence.
(vb) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.036.01, in the event that an item of Indebtedness (or any portion thereof) at any time, whether at the time of incurrence or upon the application of all or a portion of the proceeds thereof or subsequently, meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (aSection 6.01(a)(i) through (zxxi) above, the Parent Borrower shallBorrower, in its sole discretion, will classify and reclassify or later divide, classify or may subsequently reclassify such item of Indebtedness (or any portion thereof) in any one or more of the types of Indebtedness described in 6.01(a)(i) through (xxi) above and will only be required to include the amount and type of such Indebtedness in one or more such of the above clausesclauses as determined by the Borrower at such time; provided that all Indebtedness outstanding under that originally reduced the Loan Documents Free and Clear Usage Amount at the time of incurrence may not be reclassified. The Borrower will be entitled to divide and classify an item of Indebtedness in more than one of the types of Indebtedness described in 6.01(a)(i) through (xxii) above.
(c) For purposes of determining compliance with any dollar-denominated restriction on the incurrence of Indebtedness, the dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in reliance only on the exception in clause connection with such refinancing.
(ad) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion or amortization of accreted value and OID, the payment of interest in the form of additional Indebtedness with the same terms, shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.036.01.
Appears in 2 contracts
Sources: Credit Agreement (Select Medical Holdings Corp), Credit Agreement (Concentra Group Holdings Parent, Inc.)
Indebtedness. CreateThe Borrowers will not, incurnor will they permit any of their Subsidiaries to, assume create, incur or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower The Loans and any of its Subsidiaries under the Loan Documents;other Obligations.
(b) Indebtedness existing on the date hereof and described in Schedule 6.11 and any renewal, extension or refinancing of such Indebtedness that does not increase the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 thereof in excess of accrued interest and any Permitted Refinancing thereof;applicable prepayment fees then owing.
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;arising under non-speculative Rate Management Transactions.
(d) Guarantee Obligations Receivables Transaction Attributed Indebtedness not to exceed the principal amount of $175,000,000, any performance guaranties directly related thereto, and any notes owing from (i) special-purpose entities to any Subsidiaries of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness or (ii) any Subsidiary of the Parent Borrower to any other Subsidiary of the Parent, in each case that have sold or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may notconveyed accounts receivable to such special-purpose entities or such Subsidiary, by virtue of this Section 7.03(d)as applicable, guarantee Indebtedness that which such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is notes are subordinated to the Obligations, such Guarantee Obligation shall be subordinated indebtedness owing to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;any financial institution or investor providing financing for Qualified Receivables Transactions.
(e) Subordinated Indebtedness of the Parent Borrower or any Restricted Subsidiary owing permitted pursuant to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;6.19.
(f) (i) Attributable Indebtedness Notes Payable and other Indebtedness (including Capitalized Leases) financing the acquisitionLease Obligations, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of such Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;325,000,000 at any time outstanding.
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect Loan Party to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;other Loan Party.
(h) Guarantee Unsecured Indebtedness of any Borrower to any non-Loan Party and any Guarantor to any non-Loan Party, provided that in each case, the payment of such Indebtedness shall be subordinated to payment of the Secured Obligations with respect to, to the written satisfaction of the Administrative Agent or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);Required Lenders.
(i) Unsecured Indebtedness representing deferred compensation of any non-Guarantor to employees of the Parent any Borrower (or any direct or indirect parent Guarantor, provided that the aggregate amount of such Indebtedness, taken together with the Investments permitted under Section 6.14(i), does not exceed $20,000,000 at any time outstanding.
(j) Sale and Leaseback Transactions permitted pursuant to Section 6.21.
(k) To the extent constituting Indebtedness, lease obligations of any Subsidiary of Parent Borrowerin connection with the IDB Transactions.
(l) and its Restricted Subsidiaries incurred Indebtedness in connection with insurance premium financing in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;.
(m) Cash Management Contingent Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;any Indebtedness otherwise permitted under this Section 6.11.
(n) Indebtedness consisting in respect of judgments not rising to an Event of Default.
(ao) Indebtedness in respect of performance bonds, bid bonds, appeal bonds and completion guaranties and similar obligations for the financing account of insurance premiums any Borrower or (b) take or pay obligations contained in supply arrangementsany Subsidiary, in each case, case arising in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;.
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zo) above, provided that the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the aggregate principal amount and type of such other Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall does not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03exceed $50,000,000 at any time outstanding.
Appears in 2 contracts
Sources: Credit Agreement (Arcbest Corp /De/), Credit Agreement (Arcbest Corp /De/)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
Documents and (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount under this clause (ii) not to exceed $2,250,000,000 500,000,000 and any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and as listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee (other than Guarantees by a Foreign Subsidiary of Indebtedness of another Foreign Subsidiary) of any Senior Notes or any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of advanced by any Loan Party owed to any Person that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness advanced by any Person that is not a Loan Party to any Loan Party shall be subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Financing Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets the applicable asset in an aggregate amount not to exceed (provided that A) the amount of such Indebtedness is incurred concurrently outstanding on the Closing Date plus (B) the greater of (1) $160,000,000 and (2) 30% of LTM Consolidated EBITDA, in each case determined at the time of incurrence at any time outstanding (together with or within two hundred seventy any Permitted Refinancings thereof but without giving effect to any increase in principal amount permitted under clause (270a) days after of the applicable acquisition, construction, repair, replacement or improvementproviso to the definition of “Permitted Refinancing”), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Restricted Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Restricted Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Restricted Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance, in each case incurred in the ordinary course of business and not for speculative purposes;
(i) Indebtedness of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition or similar Investment expressly permitted hereunder; provided that after giving pro forma effect to such Permitted Acquisition or Investment and the incurrence or assumption of such Indebtedness, the aggregate principal amount of such Indebtedness does not exceed (x) the greater of (1) $100,000,000 and (2) 20% of LTM Consolidated EBITDA at any time outstanding plus (y) any additional amount of such Indebtedness so long (A) if such incurred Indebtedness is secured by all or any portion of the Collateral on a pari passu basis with the Facilities, either (1) the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated First Lien Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted First Lien Ratio Debt, (B) if such Indebtedness is secured by all or any portion of the Collateral on a junior Lien basis to the Facilities, either (1) the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Secured Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted Junior Secured Ratio Debt or (C) if such Indebtedness is unsecured or not secured by all or any portion of the Collateral (and including all such Indebtedness of Restricted Subsidiaries that are not Loan Parties), either (1) either (I) the Consolidated Interest Coverage Ratio determined on a Pro Forma Basis would be greater than or equal to the Consolidated Interest Coverage Ratio immediately prior thereto or (II) the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis would not exceed the Consolidated Total Net Leverage Ratio immediately prior thereto or (2) the Borrower could incur $1.00 of Permitted Unsecured Ratio Debt; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding the greater of (i) $200,000,000 and (ii) 35% of LTM Consolidated EBITDA, in each case determined at the time of incurrence; provided, further, that any Indebtedness incurred (but not assumed) pursuant to this clause (g) shall be subject to the requirements included in the first proviso under the definition of “Permitted Ratio Debt”, and (ii) any Permitted Refinancing thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current future, present or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estatesControlled Investment Affiliates or Immediate Family Members, spouses or former spouses in each case, to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries prior to the Closing Date or thereafter in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation purchase price or other similar arrangements incurred by such Person prior to the Closing Date or thereafter in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of (i) $230,000,000 and (ii) 37.5% of LTM Consolidated EBITDA at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has been Not Otherwise Applied;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 45 Business Days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qi) Indebtedness supported by incurred (x) and secured on a Letter of Credit in pari passu basis with the Facilities (“Incremental Equivalent First Lien Debt”) or (y) and secured on a principal amount not to exceed junior Lien basis with the face amount of such Letter of Credit;
Facilities and any Permitted Refinancing thereof (r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary “Incremental Equivalent Junior Lien Debt”), in an aggregate principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to under this clause (A) (q), when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally Incremental Term Loans and Incremental Revolving Credit Commitments incurred pursuant to Section 2.14(d)(v) and Incremental Equivalent Unsecured Debt incurred pursuant to Section 7.03(w), not to exceed the Available Incremental Amount, so long as (x) if the proceeds of such Indebtedness are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption of any Indebtedness, no Event of Default under Sections 8.01(a) or (f) with respect to the Borrower shall have occurred and be continuing or would exist after giving effect to such Indebtedness, or (y) if otherwise, no Event of Default shall have occurred and be continuing or would exist after giving effect to such Indebtedness; provided that such Indebtedness shall (A) in the case of Incremental Equivalent First Lien Debt, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred (and in each case subject to the Permitted Earlier Maturity Indebtedness Exception); provided that the foregoing requirements of this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtednessshall not apply to the extent such Indebtedness constitutes a customary bridge facility, so long as either the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of this clause (xA) the Total Leverage Ratio and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges, (calculated on a Pro Forma BasisB) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)Incremental Equivalent First Lien Debt, (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysFacilities and, (2) such Indebtedness in the case of Incremental Equivalent Junior Lien Debt, shall not have mandatory prepayment, redemption or offer be subject to purchase events more onerous than those applicable scheduled amortization prior to maturity (and in each case subject to the Term B Loans, (3) Permitted Earlier Maturity Indebtedness Exception); provided that the other terms and conditions foregoing requirements of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (rB) and Section 7.03(v) by Non-Loan Parties shall not exceed apply to the greater extent such Indebtedness constitutes a customary bridge facility, so long as the long-term Indebtedness into which such customary bridge facility is to be converted or exchanged satisfies the requirements of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus this clause (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed conversion or exchange is subject only to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loansconditions customary for similar conversions or exchanges, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is secured on a junior Lien basis by a Loan Party with respect to Collateral, be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be subject to the First Lien Intercreditor Agreement, (D) in the case of Incremental Equivalent First Lien Debt in the form of a term loan facility of loans, be subject to the Loan Parties and is secured by a Lien on MFN Protection (but subject to the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso MFN Trigger Amount exception to Section 2.14(b)(iisuch MFN Protection) shall have been complied with as if such Indebtedness was considered were an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) have terms and conditions (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of other than (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisitionpricing, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtednessrate floors, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtednessdiscounts, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligationsfees, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing premiums and optional prepayment or redemption terms or provisions and (y) covenants or other provisions applicable only to periods after the maturity date Latest Maturity Date at the time of incurrence of such Indebtedness and to the extent any financial maintenance covenant is added for the benefit of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, to the extent that such financial maintenance covenant is also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, as applicable) that in the good faith determination of the Term Loans being refinancedBorrower (i) are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) or (ii) reflect market terms and conditions on (taken as a whole) at the date time of incurrence or issuance and such Indebtedness shall not participate (provided that a certificate of the Borrower as to the satisfaction of the conditions described in mandatory prepayments on a greater than pro rata basis with the Term Loans and this clause (E) the Parent Borrower has delivered at least five (5) Business Days prior to the Administrative Agent a certificate incurrence of a Responsible Officer of the Parent Borrowersuch Indebtedness, together with all relevant financial information reasonably requested by the Administrative Agent, including a reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one description of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify materials terms and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in one or more good faith that such terms and conditions satisfy the foregoing requirements of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in this clause (a) of this Section 7.03 and the Senior Secured Notes will E), shall be deemed to have been conclusive); provided, that any such Indebtedness incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interestby a Restricted Subsidiary that is not a Loan Party, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.together with any Indeb
Appears in 2 contracts
Sources: Credit Agreement (Alight Group, Inc.), Credit Agreement (Alight Inc. / DE)
Indebtedness. CreateThe Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(ai) Indebtedness of the Parent Borrower and any of its Subsidiaries created under the Loan Documents;
(bii) Indebtedness existing on the Effective Date and set forth in Schedule 6.01 and extensions, renewals and replacements of the Borrowers in respect of the Senior Secured Notes any such Indebtedness, provided that such extending, renewal or replacement Indebtedness (and Guarantees thereof by the GuarantorsA) in an aggregate principal amount shall not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) be Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in an obligor that was not an obligor with respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if to the Indebtedness being guaranteed is subordinated to extended, renewed or replaced, (B) shall not be in a principal amount that exceeds the Obligationsprincipal amount of the Indebtedness being extended, renewed or replaced (plus any accrued but unpaid interest fees and redemption premium payable by the terms of such Guarantee Obligation Indebtedness thereon), (C) shall not have any earlier maturity date or shorter weighted average life than the Indebtedness being extended, renewed or replaced and (D) shall be subordinated to the Guarantee Obligations on the same terms, if any, as the Indebtedness being extended, renewed or replaced;
(iii) Indebtedness of the Borrower to any Subsidiary and of any Restricted Subsidiary to the Borrower or any other Subsidiary, provided (A) that Indebtedness of any Restricted Subsidiary that is not a Loan Party to the Borrower or any Subsidiary Loan Party shall be subject to Section 6.04 and (B) Indebtedness of the Borrower to any Restricted Subsidiary that is not a Subsidiary Loan Party and Indebtedness of any Subsidiary Loan Party to any Subsidiary that is not a Subsidiary Loan Party shall be subordinated to the Obligations on terms at least as favorable reasonably satisfactory to the Lenders as those contained in the subordination of such IndebtednessAdministrative Agent;
(eiv) Guarantees by the Borrower of Indebtedness of the Parent Borrower Holdings or any Restricted Subsidiary owing to and by any Restricted Subsidiary of Indebtedness of Holdings, the Parent Borrower or any other Restricted Subsidiary to Subsidiary, provided that (A) the extent constituting an Investment Indebtedness so Guaranteed is permitted by this Section 7.02; provided that all such (other than clause (a)(ii) or (a)(vi)), (B) Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject to Section 6.04, (C) Guarantees permitted under this clause (iv) shall be subordinated to the subordination terms set forth in Section 3.01 Obligations of the Guarantyapplicable Restricted Subsidiary to the same extent and on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations and (D) no Subordinated Debt shall be Guaranteed by any Restricted Subsidiary unless such Restricted Subsidiary is a Loan Party that has Guaranteed the Obligations pursuant to the Collateral Agreement;
(fA) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing of the Borrower or any Restricted Subsidiary incurred to finance the acquisition, construction, repair, replacement construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed by the Borrower or any Restricted Subsidiary in connection with the acquisition of any such assets (or secured by a Lien on any such assets prior to the acquisition thereof, provided that such Indebtedness is incurred concurrently with prior to or within two hundred seventy (270) 180 days after such acquisition or the applicable acquisition, construction, repair, replacement completion of such construction or improvement), (iiB) Attributable extensions, renewals and replacements of any such Indebtedness arising out of Permitted Sale Leasebacks in an aggregate so long as the principal amount of any such extensions, renewals or replacements does not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA principal amount of the Parent Borrower for Indebtedness being extended, renewed or replaced (plus any accrued but unpaid interest, fees and premiums payable by the most recently ended Test Period and (iii) any Permitted Refinancing terms of any such Indebtedness set forth in the immediately preceding clauses (ithereon) and (ii); C) Capital Lease Obligations incurred by the Borrower or any Restricted Subsidiary in respect of any Permitted Sale and Leaseback Transaction, provided that the aggregate principal amount of Indebtedness permitted by sub-clauses (including without limitation Attributable Indebtedness, but excluding Attributable A) and (B) of this clause (v) shall not exceed $150,000,000 at any time outstanding;
(vi) Indebtedness incurred of any Person (A) that becomes a Restricted Subsidiary or merges with or into a Restricted Subsidiary or the Borrower after the Effective Date or (B) all or substantially all the assets of which are acquired by the Borrower or any Restricted Subsidiary pursuant to clause (ii)) under this Section 7.03(f) a transaction in which Indebtedness is assumed by the Borrower or any Restricted Subsidiary, in each case after the Effective Date, provided that such Indebtedness exists at the time such Person becomes a Restricted Subsidiary or merges with or into a Restricted Subsidiary or the Borrower or at the time of such asset acquisition, and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary or merging with or into a Restricted Subsidiary or the Borrower or at the time of such asset acquisition, and extensions, renewals and replacements of any such Indebtedness so long as the principal amount of such extensions, renewals and replacements does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA principal amount of the Parent Borrower for Indebtedness being extended, renewed or replaced (plus any accrued but unpaid interest and redemption premium payable by the most recently ended Test Periodterms of such Indebtedness thereon), provided that the aggregate principal amount of Indebtedness permitted by this clause (vi) shall not exceed $175,000,000 at any time outstanding;
(gvii) Indebtedness in respect of netting services, overdraft protection or in connection with deposit accounts and securities accounts, in each case incurred in the ordinary course of business;
(viii) Indebtedness owed to any Person (including obligations in respect of letters of credit for the benefit of such Person) providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;
(ix) Indebtedness of the Borrower or any Restricted Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations (other than in respect of other Indebtedness for borrowed money), in each case provided in the ordinary course of business;
(x) Indebtedness in respect of Swap Contracts Agreements permitted by Section 6.07;
(ixi) entered into (A) Subordinated Debt that is issued for cash payable on the date of issuance thereof or as consideration for a Permitted Acquisition, provided that (1) if such Subordinated Debt is issued for cash, the Net Proceeds of such Subordinated Debt are used, promptly after such Net Proceeds are received by the Borrower, (x) to hedge consummate one or mitigate risks more Permitted Acquisitions, or (y) to prepay Terms Loans pursuant to Section 2.11(c), (2) no Default has occurred and is continuing or would result therefrom and (3) the Borrower is in compliance on a Pro Forma Basis after giving effect to the incurrence of such Subordinated Debt with the covenants contained in Sections 6.12 and 6.13 recomputed as of the last day of the most-recently ended Test Period prior to the issuance of such Subordinated Debt for which financial statements have been delivered pursuant to Section 5.01(a) or (b) and, in the Parent Borrower or case of any Subsidiary issuance of Subordinated Debt in an aggregate principal amount in excess of $15,000,000, has actual or anticipated exposure delivered to the Administrative Agent a certificate of a Financial Officer to such effect, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clause (other than those 3) above and (B) Subordinated Refinancing Indebtedness in respect of shares of capital stock Subordinated Debt issued pursuant to clause (A) above or other equity ownership interests of the Parent Borrower or any Subsidiarythis clause (B), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(hxii) Guarantee Obligations with respect toGuarantees of, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its the Restricted Subsidiaries, in each case to the extent permitted by pursuant to Section 7.02(y6.04(o);
(ixiii) Indebtedness representing deferred compensation secured by Liens pursuant to employees of the Parent Borrower (or any direct or indirect parent of the Parent BorrowerSection 6.02(xiii) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate principal amount not to exceed exceeding $20,000,000 50,000,000 at any one time outstanding;
(kxiv) Indebtedness incurred of Holdings or the Borrower not exceeding $20,000,000 at any time outstanding, evidenced by promissory notes issued to former or current management, directors, Franchisees or employees of Holdings, the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisitionlieu of any cash payment permitted to be made under Section 6.08(a)(iii), any other Investment provided that all such Indebtedness shall be unsecured and expressly permitted hereunder or any Disposition, in each case subordinated to the extent constituting indemnification obligations or obligations prior payment in respect full in cash of purchase price (including earn-outs) or other similar adjustmentsall Obligations on terms that are reasonably satisfactory to the Administrative Agent;
(lxv) Indebtedness consisting of obligations of the Parent Borrower or Foreign Subsidiaries in an aggregate principal amount not exceeding $20,000,000 at any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereundertime outstanding;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (axvi) the financing of insurance premiums Senior Notes and any Guarantee by Holdings or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness Subsidiary Loan Party of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at obligations under the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Senior Notes and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(sxvii) other Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) exceeding $600,000,000 30,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutionsoutstanding; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;and
(ixviii) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers Borrower to the extent that 100% of the Borrowers shall have been permitted Net Proceeds therefrom are, immediately after the receipt thereof, applied solely to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred the prepayment of Term Loans in reliance on, accordance with Section 2.142.11(c); provided that (A) such Indebtedness shall does not mature earlier than require any scheduled payment of principal (including pursuant to a sinking fund obligation) or mandatory redemption or redemption at the option of the holders thereof (except for redemptions in respect of asset sales and changes in control on terms that are market terms on the date of issuance) prior to the date that is 180 days after the Tranche B Maturity Date applicable or, if such Indebtedness is incurred after the Borrower has obtained any Incremental Term Loans or while any Commitments from Additional Lenders to make Incremental Term Loans remain in effect, 180 days after the maturity date for such Incremental Term B Loans, unless all such Incremental Term Loans have been repaid in full and all Commitments in respect thereof have been terminated, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor Loan Party which shall have previously or substantially concurrently guaranteed Guaranteed the Obligations, (DC) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect contains market terms on the date of issuance, provided that if such Indebtedness contains any financial maintenance covenants, such covenants shall not be tighter than those contained in this Agreement, (D) if any Term Loans remain outstanding after giving effect to the prepayment required hereunder, the aggregate principal amount of such outstanding Term Loans shall not be less than $250,000,000 and (E) if the Borrower is in compliance on a Pro Forma Basis after giving effect to the incurrence of such Indebtedness is with the covenants contained in the form of a term loan facility Sections 6.12 and 6.13 recomputed as of the Loan Parties and is secured by a Lien on last day of the Collateral that is pari passu with most recently-ended Test Period prior to the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall incurrence of such Indebtedness for which financial statements have been complied with as if such Indebtedness was considered an Incremental Term Loan delivered pursuant to Sections 5.01(a) or (b), and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerFinancial Officer, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Burger King Holdings Inc), Credit Agreement (Burger King Holdings Inc)
Indebtedness. CreateNone of the Covenant Parties or any of their Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments or any refinancings thereof;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of Closing Date and listed on Schedule 7.03(b) to the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Original Credit Agreement and any Permitted Refinancing thereofrefinancing thereof and, until the first Business Day following the Pushdown Date, the Outstanding Indebtedness and (ii) intercompany Indebtedness outstanding on the Closing Date evidenced by an Intercompany Note and any refinancing thereof evidenced by an Intercompany Note;
(c) (i) Indebtedness of the Parent Borrower Guarantees by any Covenant Party and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower any Covenant Party or any Restricted Subsidiary of a Covenant Party otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any Senior Subordinated Debt, Senior Unsecured Debt or Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower a Covenant Party or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, lease or improvement of a fixed or capital asset incurred by a Covenant Party or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) (i) entered into to hedge or mitigate risks to which the Parent Borrower Indebtedness of any Covenant Party or any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided, in each case that such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (v) is unsecured or is subordinated to the Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Debt Documentation as of the Pushdown Date, (w) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) the Covenant Parties and their Restricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the latest Maturity Date (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemption provisions satisfying the requirement of clause (y) hereof), (y) has actual or anticipated exposure terms and conditions (other than those in respect of shares of capital stock or other equity ownership interests interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Covenant Parties as the terms and conditions of the Parent Borrower Senior Subordinated Debt; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or any Subsidiary)drafts of the documentation relating thereto, stating that ▇▇▇▇▇▇▇ has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrowers within such five Business Day period that it disagrees with such determination (iiincluding a reasonable description of the basis upon which it disagrees) entered into in order to effectively cap, collar or exchange interest rates and (from fixed to floating rates, from one floating rate to another floating rate or otherwisez) with respect to any interest-bearing liability or investment of such Indebtedness described in the Parent Borrower or any Subsidiary and immediately preceding clause (iii) entered into to hedge commoditiesB), currencies, general economic conditions, raw materials prices, revenue streams or business performanceis incurred by a Loan Party;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (any Covenant Party or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by any Covenant Party or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (NHF or any direct or indirect parent thereof) of NHF permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent Disposition constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of any Covenant Party or any of its Restricted Subsidiaries, in an aggregate principal amount that at the ordinary coursetime of, and after giving effect to, the incurrence thereof, would not exceed $400,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower any Covenant Party or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness constituting the Senior Subordinated Debt and/or the Senior Unsecured Debt;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness of non-Guarantor Subsidiaries incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in the ordinary course of business on ordinary business terms in an aggregate principal amount outstanding not to exceed $75,000,000 at any time;
(t) Indebtedness of the Covenant Parties or the Restricted Subsidiaries (i) assumed in connection with any Permitted Acquisition or (ii) incurred to finance a Permitted Acquisition, in each case, that is secured only by the assets or business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests of a Person and including, for the avoidance of doubt, the assets owned by such Person) and so long as both immediately prior and after giving effect thereto, (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks no Default shall exist or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loansresult therefrom, (B) as of the date of Company and the incurrence of such IndebtednessRestricted Subsidiaries will be in Pro Forma Compliance with the covenants set forth in Section 7.11, and (C) the Weighted Average Life to Maturity aggregate principal amount of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such and all Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause paragraph (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereofdoes not exceed $200,000,000;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingconnection with a Permitted Receivables Financing;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofOffering;
(w) Indebtedness caused by granting the Ratable Security of EMTNs; and
(zx) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yw) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Nielsen Holdings N.V.), Credit Agreement (Nielsen Holdings N.V.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan DocumentsObligations;
(b) Indebtedness of the Borrowers (including any unused commitment in respect of thereof) outstanding on the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted in Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Secured Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Junior Financing of any Loan Party shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Secured Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Secured Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Secured Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party), provided that, in the extent constituting case of Indebtedness of a non-Loan Party owing to a Loan Party, such Indebtedness is an Investment permitted by Section 7.027.02 or consists of any part of a Permitted Reorganization or IPO Reorganization Transaction; provided further that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Collateral Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the Secured Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, constructionlease or improvement of the applicable asset thereof in an aggregate amount not to exceed the greater of $3,750,000 and 12.5% of Trailing Four-Quarter Consolidated EBITDA, repair, replacement or improvement), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of such Attributable Indebtedness;
(f) Secured Hedge Obligations and other Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Indebtedness set forth Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the immediately preceding clauses (i) ordinary course of business and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 for speculative purposes and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodGuarantees thereof;
(g) Indebtedness in respect of Swap Contracts the Borrower or any Restricted Subsidiary (i) entered into to hedge assumed in connection with any Permitted Acquisition or mitigate risks to which the Parent Borrower other similar Investment permitted hereunder and any Permitted Refinancing thereof; provided that (x) such Indebtedness is not incurred in contemplation of such Permitted Acquisition or other similar Investment permitted hereunder or any Subsidiary has actual Permitted Refinancing thereof and (y) the obligors with respect to such Indebtedness are limited to the Persons acquired in such Permitted Acquisition or anticipated exposure (other than those in respect of shares of capital stock Investment or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into incurred to finance any Permitted Acquisition or Investment permitted hereunder (including earn-out obligations, Indebtedness incurred to finance the payment thereof and seller notes); provided, that after giving pro forma effect to such Permitted Acquisition or Investment permitted hereunder and the incurrence of such Indebtedness, the aggregate amount of such Indebtedness incurred pursuant to this clause (ii) does not exceed at any time outstanding (x) the greater of $4,500,000 and 15.0% of Trailing Four Quarter Consolidated EBITDA, in order to effectively capeach case, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment determined as of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceapplicable date of incurrence;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former managers, officers, directors, partnersadvisors, managersservice providers, consultants and or employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in connection with the Transactions, a Permitted Acquisition, any other Investment expressly permitted hereunder hereunder, merger or any DispositionDisposition permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price adjustments or other similar adjustments (including earn-outs) or other similar adjustmentsouts and obligations in respect of transaction tax benefits);
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) (i) Secured Cash Management Obligations and Obligations, (ii) other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections Cash Management Services and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof, (iii) Indebtedness resulting from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business and solely with respect to each incurrence pursuant to this clause (iii), so long as such Indebtedness is extinguished within 10 Business Days of its incurrence, and (iv) endorsement of instruments or other payment items for deposit in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $10,000,000 and 33.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) to extent constituting Indebtedness, obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case case, in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) letters of credit in an aggregate face amount at any time outstanding not to exceed the greater of $3,000,000 and 10.0% of Trailing Four Quarter Consolidated EBITDA, in each case, determined as of the date of incurrence consisting of (i) letters of credit issued in currencies not available hereunder or (ii) documentary or commercial letters of credit not issued hereunder;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(st) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Non-Restricted Subsidiary that is not a Loan PartyParty which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(u) and guarantees thereof by Non-Loan Partythen outstanding for all such Persons taken together, does not exceed the greater of $5,250,000 and 17.5% of Trailing Four Quarter Consolidated EBITDA, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) each case determined as of the date of incurrence;
(v) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to the incurrence Borrower or any of such Indebtednessthe Restricted Subsidiaries; provided, that the Weighted Average Life to Maturity aggregate principal amount of such Indebtedness at any time outstanding in connection therewith shall not be shorter than that exceed $15,000,000;
(w) [reserved];
(x) [reserved];
(y) unsecured Indebtedness in an amount equal to the lesser of 100% of the Term B Loansnet cash proceeds received by Holdings (or any direct or indirect parent thereof) since immediately after the Closing Date from the issuance or sale of Equity Interests of Holdings (or any direct or indirect parent thereof) or cash contributed to the capital of Holdings (or any direct or indirect parent thereof) (in each case, other than proceeds of Disqualified Equity Interests or sales of Equity Interests to Holdings (Cor any direct or indirect parent thereof) no Restricted Subsidiary is a borrower or guarantor with respect any of its Subsidiaries) to the extent such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall net cash proceeds or cash have previously or substantially concurrently guaranteed been contributed to the Obligations, (D) the other terms Borrower and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso have not been applied pursuant to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan 7.02, 7.06 or 7.13 and do not constitute Cure Amounts;
(F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (Ez) (such i) Indebtedness in respect of Other Term Loans and Other Notes incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) or issued in accordance with Section 2.14 and (ii) any Permitted Refinancing Refinancings thereof;
(uaa) additional Indebtedness incurred by the Borrower as a result of the exchange of Term Loans assigned to the Borrower pursuant to Section 10.07(k), as long as such Indebtedness would be a Permitted Refinancing of such Term Loans;
(bb) obligations in respect of Disqualified Equity Interests (x) issued to and held by the Borrower, Holdings or any Restricted Subsidiary (to the extent permitted by Section 7.02) or (y) in an aggregate principal amount not to exceed the greater of (x) $500,000,000 1,200,000 and (y) 30.04.0% of Trailing Four Quarter Consolidated EBITDA EBITDA, in each case, determined as of the Parent Borrower for the most recently ended Test Period at any one time outstandingdate of incurrence;
(vcc) intercompany Indebtedness incurred to finance or assumed in connection with a Permitted AcquisitionReorganization or IPO Reorganization Transaction, provided that (i) after giving Pro Forma Effect to so long as such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such intercompany Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been constitutes an Investment permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;7.02(j); and
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(ydd) Indebtedness in respect of Permitted Debt Exchange Notes aircraft or related equipment financing in an amount not to exceed $20,000,000 at any time outstanding (together with any amounts incurred under any Aircraft Trust Arrangement); provided, that, (I) any such Indebtedness that constitutes Pari Passu Secured Obligations shall be subject to the separate agreement among the Lenders entered into on the Closing Date or a Parity Intercreditor Agreement, as applicable, (II) any such Indebtedness that is incurred pursuant to Section 7.03(a), Section 7.03(s), Section 7.03(t), Section 7.03(u), Section 7.03(z) or Section 7.03(aa) and is secured by the Collateral on a Permitted Debt Exchange junior basis shall be subject to a Junior Intercreditor Agreement, and (III) any such Indebtedness that constitutes Pari Passu Secured Obligations or which is secured by the Collateral on a junior basis shall be junior in accordance right of payment to the Revolving Credit Facility to the extent set forth in such agreement among Lenders or such Intercreditor Agreement. For purposes of determining compliance with Section 2.17 any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, Refinance, renew or defease other Indebtedness denominated in a foreign currency, and any Permitted such extension, replacement, refunding, Refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, Refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing thereof; and
(z) all Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, Refinanced, renewed or defeased, plus the aggregate amount of fees, underwriting discounts, premiums (if any), interest including tender premiums) and other costs and expenses (including OID) incurred in connection with such Refinancing. Interest (including post-petition interest), the accrual of interest, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and premiums (if any), fees, expenses, charges and additional or contingent interest on obligations described shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in clauses (a) through (y) aboveaccordance with GAAP. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (aSections 7.03(a) through (z) above7.03(dd), the Parent Borrower shall, in its sole discretion, divide or classify and reclassify or later divide, classify divide or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents on the Closing Date will be deemed to have been be incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.03(a).
Appears in 2 contracts
Sources: Credit Agreement (AEVEX Corp.), Credit Agreement (AEVEX Corp.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount not to exceed $2,250,000,000 1,500,000,000 and, in the case of this clause (ii), any Permitted Refinancing thereof and (iii) the Opco Senior Notes Documents in an aggregate principal amount not to exceed $1,000,000,000 and, in the case of this clause (iii), any Permitted Refinancing thereof;
(c) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any 5 5/8% Senior Notes, Opco Senior Notes or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed 5.0% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed in connection with any Permitted Acquisition so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) $100,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long (i) entered into if such Indebtedness is secured on a junior basis to hedge or mitigate risks the Facilities, the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis is no greater than 6.15 to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary)1.00, (ii) entered into in order if such Indebtedness is secured on a pari passu basis with the Facilities, the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than 3.75 to effectively cap, collar 1.00 or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commoditiesif such Indebtedness is unsecured, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of Fixed Charge Coverage Ratio on a consolidated basis for the Parent Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom); provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding 4.25% of Total Assets, in each case to determined at the extent permitted by Section 7.02(y)time of incurrence;
(ih) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of $800,000,000 and 4.0% of Total Assets at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y));
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A) and Section 2.14(d)(v)(B), not to exceed $1,500,000,000; provided that such Indebtedness shall (A) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party, be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (x) in the form of debt securities and (y) subject to the First Lien Intercreditor Agreement and (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding 4.25% of Total Assets, in each case determined at the time of incurrence;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[Reserved];
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 and (y) 25.010% of Consolidated EBITDA Foreign Subsidiary Total Assets;
(w) unsecured Indebtedness of the Parent Borrower or any Restricted Subsidiary, so long as the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended Test Period four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and without duplication, Permitted Refinancings of such Indebtedness; provided that any one time outstanding;
(i) such Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary that is not a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerLoan Party, together with all relevant financial information reasonably requested any Indebtedness incurred by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Aa Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), (B7.03(q) or 7.03(s), (C) and (D) and (ii) does not exceed in the aggregate at any Permitted Refinancing thereoftime outstanding, 4.25% of Total Assets, in each case determined at the time of incurrence;
(x) Indebtedness with respect to any arising from Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofIntercompany Activities; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zx) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, divide or classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents, any Senior Notes Documents and any Opco Senior Notes Documents and, in each case, any Permitted Refinancing thereof, will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.03(a).
Appears in 2 contracts
Sources: Credit Agreement (Hilton Worldwide Holdings Inc.), Credit Agreement (Hilton Worldwide Holdings Inc.)
Indebtedness. CreateHoldings and the Borrower will not, nor will they permit any Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries created under the Loan DocumentsDocuments (including any Refinancing Term Loans and any Incremental Term Loans);
(b) Indebtedness of existing on the Borrowers Closing Date and set forth in Schedule 6.01 to the Disclosure Letter (and any Refinancing Indebtedness in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof);
(c) Permitted First Priority Refinancing Indebtedness (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries Refinancing Indebtedness in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(cthereof) and Permitted Junior Priority Refinancing Indebtedness (iii) and any Permitted Refinancing of any of the foregoingIndebtedness in respect thereof);
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Subsidiary to Holdings or any Subsidiary; provided, that, (i) any such Indebtedness owing by any Loan Party owed to any Person Subsidiary that is not a Loan Party shall be subject (A) unsecured and (B) subordinated in right of payment to the subordination Loan Document Obligations on terms set forth in Section 3.01 customary for intercompany subordinated Indebtedness, as reasonably determined by the Administrative Agent, provided, that, the limitations of the Guaranty;
subclause (fB) of this clause (i) Attributable shall not apply to Indebtedness and other Indebtedness owing by any Loan Party to any TriNet Captive Insurance Subsidiary or TriNet Trust to the extent such limitations are prohibited by (including Capitalized Leasesx) financing the acquisition, construction, repair, replacement applicable law or improvement of fixed regulation or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270y) days after the applicable acquisition, construction, repair, replacement or improvement)any TriNet Workers’ Compensation Collateral Agreement, (ii) Attributable any such Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not owing to exceed at any one time outstanding Loan Party shall be evidenced by the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of Intercompany Note, which shall have been pledged pursuant to the Parent Borrower for the most recently ended Test Period Collateral Agreement and (iii) any Permitted Refinancing of any such Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or owing by any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect that is not a Loan Party to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness Loan Party shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereofSection 6.04;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 2 contracts
Sources: Credit Agreement (Trinet Group, Inc.), Credit Agreement (Trinet Group, Inc.)
Indebtedness. CreateNo Transaction Party will, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness, except:
(i) Indebtedness under any Transaction Document;
(ii) Indebtedness existing on the date of closing and set forth in Schedule 6A and any Refinance Indebtedness in respect thereof;
(iii) Indebtedness of any Transaction Party or Subsidiary owing to any Transaction Party or Subsidiary, provided that (a) Indebtedness of the Parent Borrower owing by any Non-Transaction Party to any Transaction Party shall be subject to paragraph 6D and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof owing by the Guarantors) in an aggregate principal amount not any Transaction Party to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation Non-Transaction Party shall be subordinated to the Guarantee Notes on terms reasonably satisfactory to the Required Holder(s);
(iv) Guarantees by any Transaction Party or Subsidiary of Indebtedness of any Transaction Party or Subsidiary, provided that (a) the Indebtedness so Guaranteed is permitted by this paragraph 6A, (b) Guarantees by any Transaction Party of Indebtedness of any Non-Transaction Party shall be subject to paragraph 6D and (c) Guarantees permitted under this clause (d) shall be subordinated to the Notes on the same terms as the Indebtedness so Guaranteed is subordinated to the Notes;
(v) Indebtedness of the Company or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (vi) below; provided that (a) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (b) the aggregate principal amount of Indebtedness permitted by this clause (v), together with any Refinance Indebtedness in respect thereof permitted by clause (vi) below, shall not exceed $20,000,000 at any time outstanding;
(vi) Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the “Refinance Indebtedness”) of any of the Indebtedness described in clauses (ii), (v), (xiii) and (xiv) hereof (such Indebtedness being referred to herein as the “Original Indebtedness”); provided that (a) such Refinance Indebtedness does not increase the principal amount thereof (other than by the amount of any unused commitments thereunder, accrued interest, fees, defeasance costs and premium (including call and tender premiums), if any, underwriting discounts, fees, commissions and expenses (including original issue discount, upfront fees and similar items), in each case, in connection with the refinancing of such Original Indebtedness and the incurrence or issuance of such Refinance Indebtedness), (b) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Transaction Party or any Subsidiary (other than any accessions, improvements or additions to the property securing the Original Indebtedness and after acquired property to the extent applicable), (c) no Transaction Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (d) such Refinance Indebtedness does not have a shorter Weighted Average Life to Maturity than such Original Indebtedness, (e) the terms of such Refinance Indebtedness are not less favorable to the obligor thereunder than the original terms of such Original Indebtedness and (f) if such Original Indebtedness was subordinated in right of payment to the Notes or any of the other Notes, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least as favorable to the Lenders holders of the Notes as those contained in the subordination of that were applicable to such Original Indebtedness;
(evii) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and providing workers’ compensation, health, disability or other Indebtedness (including Capitalized Leases) financing the acquisitionemployee benefits or property, constructioncasualty or liability insurance, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into reimbursement or indemnification obligations to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiariessuch Person, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jviii) Indebtedness to current representing deferred compensation to, or former officerssimilar arrangements with, directors, partners, managers, consultants employees and employees, their respective estates, spouses or former spouses to finance independent contractors of the purchase or redemption of Equity Interests of Holdings (Company or any direct or indirect parent thereof) permitted by Section 7.06 Subsidiary to the extent incurred in an aggregate amount not to exceed $20,000,000 at any one time outstandingthe ordinary course of business and consistent with past practice;
(kix) Indebtedness incurred by the Parent Borrower Company or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price Subsidiary (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting letter of credit obligations and reimbursement obligations with respect to letters of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, credit issued in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries ), in respect of letters of creditworkers’ compensation claims, bank bid, appeal, performance or surety bonds, performance or completion guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claimstrade contracts, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent other Indebtedness with past practicerespect to reimbursement or indemnification type obligations regarding workers’ compensation claims, bid, appeal, performance or surety bonds, performance or completion guarantees, trade contracts, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance and similar obligations, in each case, in the ordinary course of business;
(qx) Indebtedness supported by a Letter to the extent constituting Indebtedness, customer deposits and advance payments (including progress payments) received in the ordinary course of Credit business from customers for goods and services purchased in a principal amount not to exceed the face amount ordinary course of such Letter of Creditbusiness;
(rxi) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(ixii) other unsecured or junior lien Indebtedness arising under the Credit Agreement, to the extent such Indebtedness is subject to the Intercreditor Agreement;
(xiii) Indebtedness of any Person that becomes a Subsidiary after the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed date hereof; provided that (Aa) $1,000,000,000 such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of any incurrence pursuant to this clause or in connection with such Person becoming a Subsidiary and (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (xb) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to permitted by this clause (rxiii), together with any Refinance Indebtedness in respect thereof permitted by clause (vi) and Section 7.03(v) by Non-Loan Parties above, shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 20,000,000 at any one time outstanding and (ii) any Permitted Refinancing thereof;outstanding; and
(sxiv) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) exceeding $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 5,000,000 at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Note Agreement (Gorman Rupp Co)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (C) any Guarantee by a Restricted Subsidiary that is not a Loan Party of any Permitted Ratio Debt or Indebtedness under Section 7.03(g) or (m) (or any Permitted Refinancing in respect thereof) shall only be permitted if such Guarantee meets the requirements of clauses (s), (g) or (m), as the case may be, of this Section 7.03;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note constitutes a negotiable instrument and is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, constructionlease or improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $18,000,000 and 24% of LTM EBITDA, repair, replacement or improvement), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale‑leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation such Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) entered into to hedge or mitigate risks to which the Parent Borrower assumed in connection with any Permitted Acquisition (provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition) or any Permitted Refinancing thereof or (ii) incurred to finance any Permitted Acquisition or any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $60,000,000, plus (y) any additional amount of such Indebtedness so long as the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation) is no greater than 5.50 to 1.00, and, (I) if such Indebtedness is designated as “Additional First Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement, the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured or secured on a junior lien basis to the First Lien Term Facility and the Revolving Credit Facility as at all times being secured on a first priority basis (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above or the Consolidated Total Secured Net Leverage Ratio described in subclause (II) below, as the case may be, at the time of the incurrence of such refinancing Indebtedness)) is no greater than 3.75 to 1.00 or (II) if such Indebtedness is designated as “Additional Second Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement, the Consolidated Total Secured Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured as at all times being secured on a pari passu basis to the Facility (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above at the time of the incurrence of such refinancing Indebtedness) is no greater than 4.50 to 1.00, in each case determined on a Pro Forma Basis; provided that in the case of clause (y), any such Indebtedness assumed or incurred by a Restricted Subsidiary has actual that is not a Loan Party (together with any Indebtedness assumed or anticipated exposure incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(s) and (u) (and any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party)) does not exceed in the aggregate at any time outstanding the greater of $60,000,000 and 60% of LTM EBITDA, in each case determined at the time of assumption or incurrence; provided, further, that in the case of clause (ii), (A) such Indebtedness does not have a Weighted Average Life to Maturity less than the remaining Weighted Average Life to Maturity of any then outstanding Term Loans or First Lien Term Loans, as the case may be, and meets the Permitted Other Debt Conditions, (B) no Event of Default shall exist or result therefrom (other than those in respect a Permitted Acquisition or a permitted Investment made pursuant to a legally binding commitment entered into a that time when no Event of shares of capital stock Default exists or other equity ownership interests of the Parent Borrower or any Subsidiarywould result therefrom), (iiC) entered into such Indebtedness shall be in order to effectively capthe form of (x) one or more series of notes which may be unsecured or secured on a senior lien, collar pari passu or exchange interest rates junior lien basis with the Facility or (from fixed to floating rates, from y) one floating rate to another floating rate or otherwise) more series of loans which may be unsecured or secured on a junior lien basis with respect to the Facility, (D) in no event will any interest-bearing liability or investment such Indebtedness incurred by a Loan Party (other than Indebtedness secured on a senior lien basis with respect to the Facility) be permitted to be mandatorily prepaid prior to the repayment in full of the Parent Borrower or Initial Term Loans, except (in the case of any Subsidiary such Indebtedness secured on a pari passu basis with the Facility only) if accompanied by at least a ratable payment of the Initial Term Loans and (iiiE) entered into the terms of any such Indebtedness that are not substantially identical to hedge commoditiesthe then existing Loans shall be no less favorable (taken as a whole) to the Lenders under the then existing Loans than those applicable to the then existing Loans or otherwise reasonably acceptable to the Administrative Agent (except for (x) covenants or other provisions applicable only to periods after the Maturity Date of the Initial Term Loans existing at the time of incurrence of such Indebtedness and (y) any financial maintenance covenant to the extent such covenant is also added for the benefit of the Initial Term Loan Lenders hereunder) or reflect market terms on the date of issuance, currencies, general economic conditions, raw materials prices, revenue streams or business performanceas determined by the Borrower;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 7.06; provided that such Indebtedness shall be subordinated in an aggregate amount not right of payment to exceed $20,000,000 at any one time outstandingthe Obligations on terms reasonably satisfactory to the Administrative Agent;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder (including through a merger) or any DispositionDisposition permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations (as defined in the First Lien Credit Agreement) and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business, so long as such Indebtedness is extinguished in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $30,000,000 and 42% of LTM EBITDA determined at the time of incurrence;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or pay take‑or‑pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance self‑insurance or other Indebtedness with respect to reimbursement-type reimbursement‑type obligations regarding workers workers’ compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in a currency other than Dollars or an Approved Alternate Currency (as defined in the First Lien Credit Agreement) in an aggregate amount at any time outstanding not to exceed $2,400,000;
(r) Indebtedness supported by a Letter letter of credit issued under the First Lien Credit Agreement, in a principal amount not to exceed the face amount of such Letter letter of Creditcredit;
(rs) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(u) and then outstanding for all such Persons taken together and all Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(g) in reliance on clause (y) thereof and Section 7.03(s) (iand any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party), does not exceed the greater of $60,000,000 and 60% of LTM EBITDA determined at the time of incurrence;
(v) other unsecured or junior lien Indebtedness of the Parent Borrower or and its Restricted Subsidiaries in respect of seller financing and any Restricted Subsidiary Permitted Refinancing in respect thereof in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 9,000,000 at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriaoutstanding;
(i) Indebtedness under the First Lien Credit Agreement (including any First Lien Incremental Term Loans under and pursuant to, and in accordance with the terms of, the First Lien Credit Agreement), (ii) any First Lien Incremental Equivalent Debt, (iii) any First Lien Credit Agreement Refinancing Indebtedness, (iv) any First Lien Permitted Debt Exchange Notes and (v) any Permitted Refinancing in respect of any of the foregoing Indebtedness (other than First Lien Credit Agreement Refinancing Indebtedness);
(x) Indebtedness in an amount equal to 100% of the Net Proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than proceeds of Disqualified Equity Interests, the Cure Amount or sales of Equity Interests to Holdings or any of its Subsidiaries) to the extent such Net Proceeds or cash have been contributed, directly or indirectly, to common equity capital of the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 (and do not otherwise increase the Cumulative Credit or the Excluded Contribution and are not used to fund Equity Funded Employee Plan Costs) (“Contribution Indebtedness”); provided that such Indebtedness is designated as “Contribution Indebtedness” in a certificate from a Responsible Officer of the Borrower on the date incurred;
(y) (i) Indebtedness in the form of senior secured, senior (x) one or more series of notes which may be unsecured, senior subordinatedsecured on a junior lien basis with the Facility or secured on a pari passu basis with the Facility or (y) one or more series of loans which may be unsecured or secured on a junior lien basis with respect to the Facility, or subordinated notes or loans) incurred by the Borrowers Borrower to the extent that the Borrowers Borrower shall have been permitted to incur such Indebtedness pursuant to, to and such Indebtedness shall be deemed to be incurred in reliance on, on Section 2.142.14(d)(iv); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Initial Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Initial Term B Loans, (C) no Restricted Subsidiary Person is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary Person is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed Guaranteed the Obligations, (D) such Indebtedness shall not be secured by any Lien on any property or asset that does not constitute Collateral securing the Facilities, (E) in no event will any Incremental Equivalent Debt be permitted to be mandatorily prepaid prior to the repayment in full of the Initial Term Loans, except (in the case of Incremental Equivalent Debt secured on a pari passu basis with the Facility only) if accompanied by at least a ratable payment of the Initial Term Loans and (F) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, issuance (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested determined by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (EBorrower) (such Indebtedness incurred pursuant to this clause (ty)) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.re
Appears in 1 contract
Sources: Second Lien Credit Agreement (Jason Industries, Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness outstanding on the Closing Date (i) not in excess of $500,000 in the Borrowers aggregate (when taken together with all other indebtedness outstanding in respect of the Senior Secured Notes reliance on this clause (and Guarantees thereof by the Guarantorsb)(i)) in an aggregate principal amount not to exceed $2,250,000,000 or (ii) listed on Schedule 7.03(b) and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness Guarantees by any Borrower or any other Restricted Subsidiary of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent any Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial and cross-guarantees of guarantees by the Parent of Indebtedness of any Borrower or any Restricted Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03permitted hereunder); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated in right of payment to the Obligations, such Guarantee Obligation shall be subordinated in right of payment to the Guarantee of the Obligations on terms (taken as a whole) at least as favorable (as reasonably determined by the Lead Borrower) to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary of the Parent owing to any Loan Party (other than the extent constituting Parent) or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party (other than the Parent) which is substantially contemporaneously transferred to a Loan Party (other than the Parent) or any Restricted Subsidiary of the Parent that is a Loan Party); provided that in the case of Indebtedness of a non-Loan Party owing to a Loan Party such Indebtedness (x) is an Investment permitted by Section 7.027.02(c)(iii), (y) consists of any part of a Permitted IPO Reorganization or Permitted Tax Restructuring or (z) is in an amount not to exceed the greater of $1,500,000 or 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma basis); provided provided, further, that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative gent in accordance with, and subject to, the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject subordinated to the Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by any Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, construction, repair, replacement lease or improvementimprovement of the applicable asset thereof in an aggregate amount not to exceed the greater of $2,000,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis), in each case, determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Sale Leasebacks Refinancing of such Attributable Indebtedness in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 1,500,000 and (y) 6.015% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period and (iiicalculated on a Pro Forma Basis) at any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to time under this clause (iie)(ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against any Borrower’s or mitigate any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of any Borrower or any Restricted Subsidiary has actual or anticipated exposure (other than those assumed in respect of shares of capital stock connection with any Permitted Acquisition or other equity ownership interests Investment permitted by Section 7.02 or Capital Expenditures (provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition or any Permitted Refinancing thereof); provided that the aggregate amount of such Indebtedness does not exceed the greater of $2,000,000 and 20% of Consolidated EBITDA as of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment last day of the Parent Borrower or most recently ended Test Period (calculated on a Pro Forma Basis) at any time outstanding; provided, further, that the aggregate principal amount of any such Indebtedness assumed under this clause (g) by any Restricted Subsidiary that is not a Loan Party shall not exceed the greater of $1,000,000 and 10% of Consolidated EBITDA as of the last day of the most recently ended Test Period (iiicalculated on a Pro Forma Basis) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceat any time outstanding;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation or similar arrangements to employees of the Parent Borrower (Borrowers or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by any Borrower or any of the other Restricted Subsidiaries of the Parent to current or former officers, directors, partners, managers, consultants consultants, advisors, directors and employees, their respective estates, spouses or former spouses of Parent (or any direct or indirect parent thereof) and any Restricted Subsidiary to finance the purchase or redemption of Equity Interests of Holdings (the Lead Borrower or any direct or indirect parent thereof) of the Lead Borrower permitted by Section 7.06 7.06;
(j) Indebtedness incurred by any Borrower or any of the other Restricted Subsidiaries of the Parent in an aggregate amount connection with the Transactions, a Permitted Acquisition, any other Investment, merger or Disposition permitted hereunder or transaction with Affiliates permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of deferred purchase price (including earn-outs and seller paper) or other similar adjustments which, solely in the case of seller paper, shall not to exceed the greater of $20,000,000 2,000,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding;
(k) Indebtedness incurred by the Parent consisting of obligations of any Borrower or any of its the other Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements (in each case other than in respect of deferred purchase price (including, without limitation, earn-outs and seller paper)) incurred by such Person in connection with the Transaction and Transactions, Permitted Acquisitions Acquisitions, transactions with Affiliates or any other Investment expressly Investment, in each case, permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $1,500,000 and 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis);
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent any Borrower or any of its the other Restricted Subsidiaries of the Parent in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of self-insurance, performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent any Borrower or any of its the other Restricted Subsidiaries of the Parent or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) Indebtedness supported by a Letter letters of Credit credit (i) issued in a principal an aggregate amount at any time outstanding not to exceed $2,000,000, (ii) constituting trade letters of credit in an aggregate amount at any time outstanding not to exceed $500,000 and (iii) in additional amounts to the extent the extent the issuance thereof is accompanied by a simultaneous permanent reduction in Revolving Commitments in an amount equal to the maximum face amount value of such Letter letter of Creditcredit;
(r) [Reserved];
(is) other unsecured or junior lien Indebtedness of Permitted Ratio Debt and any Permitted Refinancing thereof; provided that, with respect to any such Permitted Ratio Debt and/or Permitted Refinancing thereof that is secured on a pari passu basis with the Parent Borrower or any Restricted Subsidiary in an aggregate amount not Obligations, the Lenders party to exceed (A) $1,000,000,000 this Agreement at the time of the proposed incurrence of any incurrence pursuant to this clause (A) (when aggregated with such Permitted Ratio Debt or Permitted Refinancing thereof shall have the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtednessright, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 pro rata basis, to make an initial offer with respect to any such Permitted Ratio Debt or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(st) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutionsCredit Agreement Refinancing Indebtedness; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral)that, (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to any such Credit Agreement Refinancing Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and that is secured by on a Lien on the Collateral that is pari passu basis with the Lien securing the Obligations, the terms set forth in Lenders party to this Agreement at the proviso to Section 2.14(b)(ii) time of the proposed incurrence of any such Credit Agreement Refinancing Indebtedness shall have been complied the right, on a pro rata basis, to make an initial offer with as if respect to any such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional Indebtedness of a Subsidiary of the Parent (other than a Loan Party) in an aggregate principal amount outstanding not to exceed the greater of (x) $500,000,000 2,000,000 and (y) 30.020% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (calculated on a Pro Forma Basis) at any time outstanding;
(v) [reserved];
(w) Indebtedness in respect of Other Term Loans and Other Notes incurred or issued in accordance with Section 2.14 (and Permitted Refinancings thereof);
(x) not greater than 4.00:1.00 or Incremental Loans and Revolving Commitment Increases incurred in accordance with Section 2.14 and Permitted Refinancings thereof;
(y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation Indebtedness of such Permitted Acquisition any Borrower and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility any other Restricted Subsidiaries of the Loan PartiesParent in respect of any Supplier Financing Facilities in the ordinary course of business;
(z) Indebtedness (a) of any Securitization Subsidiary arising under any Qualified Securitization Financing at any time, (b) of any Borrower or any other Restricted Subsidiary of the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred arising under any Receivables Facility or (c) in reliance on, Section 2.14, and the terms set forth connection with accounts receivable factoring facilities in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such ordinary course of business; provided that the aggregate amount of Indebtedness incurred pursuant to this clause (Bz) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 2,500,000 and (y) 25.025% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(yaa) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 2.18; provided that, with respect to any such Permitted Debt Exchange Notes that are secured on a pari passu basis with the Obligations, the Lenders party to this Agreement at the time of the proposed incurrence of any such Permitted Debt Exchange Notes shall have the right, on a pro rata basis, to make an initial offer with respect to any such Permitted Debt Exchange Notes;
(bb) Indebtedness to the seller of any business or assets permitted to be acquired by the Parent or any Restricted Subsidiary under this Agreement; provided that the aggregate amount of Indebtedness permitted under this clause (bb) shall not exceed the greater of $1,500,000 and 15% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) outstanding at any Permitted Refinancing thereoftime; provided, further, that, other than Indebtedness in an amount not to exceed the greater of $1,000,000 and 10% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) at any time outstanding, such Indebtedness contains subordination terms (or is subject to a subordination agreement in favor of the Administrative Agent and Lenders) acceptable to each of the Lead Borrower and the Administrative Agent in its reasonable discretion;
(cc) obligations in respect of Disqualified Equity Interests and preferred Equity Interests in an amount not to exceed the greater of $1,000,000 and 10% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis) outstanding at any time;
(dd) Indebtedness consisting of management fees to any Sponsor payable pursuant to the Management Agreement;
(ee) to the extent constituting Indebtedness, Guarantees in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of the Borrowers and the other Restricted Subsidiaries of the Parent in an aggregate amount not to exceed at any time outstanding the greater of $1,000,000 and 10% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis);
(ff) Indebtedness in an amount not to exceed at any time outstanding the Excluded Contribution Amount; and
(zgg) to the extent constituting Indebtedness, all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yff) above. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Parent dated such date prepared in accordance with GAAP. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from t
Appears in 1 contract
Sources: Credit Agreement (Redwire Corp)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Unsecured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) Indebtedness existing on the date hereof (ix) Indebtedness with an individual value not in excess of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, $5,000,000 or (iiy) Surviving Indebtedness listed on Schedule 7.03(c) and in each case of the foregoing clauses (iiix) and (y), any Permitted Refinancing of any of the foregoingthereof;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, (x) if the Indebtedness being guaranteed is subordinated to the Loan Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Loan Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (y) Guarantee Obligations made by a Loan Party with respect to Indebtedness of a Non-Loan Party must be permitted pursuant to Section 7.02;
(e) Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 3.02 of the GuarantyGuaranty (but only to the extent permitted by applicable law and not giving rise to material adverse tax consequences);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed exceed, at the time of the incurrence thereof, the greater of (x) $350,000,000 98,000,000 and (y) 20.015.0% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts not for speculative purposes (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with obligations of non-wholly owned Foreign Subsidiaries that are Restricted Subsidiaries in respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, Disqualified Equity Interests in each case an amount not to the extent permitted by Section 7.02(y)exceed $10,000,000 at any time outstanding;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrowercompany) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current future, present or former directors, officers, directorsmembers of management, partners, managers, employees or consultants and employees, of the Borrower or any of its Subsidiaries or their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Borrower (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06(f);
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower (or any parent company) or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Transactions, the Spin-Off, Permitted Acquisitions or and/or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, cash pooling arrangements, purchase card and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) Indebtedness (whether secured or unsecured) (i) in an unlimited amount, of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary) after the date hereof and/or any other unsecured or junior lien Indebtedness of the Parent Borrower otherwise assumed in connection with an acquisition or any other Investment not prohibited hereunder, to the extent in the case of this clause (i), such Indebtedness was not incurred in contemplation of such acquisition or other Investment and such Indebtedness constitutes the obligations of only such newly acquired Restricted Subsidiary Subsidiaries, (ii) incurred in connection with a Permitted Acquisition or other Investment not prohibited hereunder, in an aggregate principal amount for this clause (ii), not to exceed (A) $1,000,000,000 exceed, at the time of any the incurrence pursuant to this clause thereof, (A) the Fixed Incremental Amount (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally taking into account any amounts already incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) belowthereon) plus (B) an additional unlimited additional unsecured or junior lien Indebtedness, amount so long as either after giving Pro Forma Effect thereto (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to secured by a Lien on the date Collateral that is 91 days after pari passu with the Maturity Date of Lien on the Term B Loans or have a Weighted Average Life to Maturity less than Collateral securing the Weighted Average Life to Maturity of Obligations, the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall First Lien Leverage Ratio does not exceed the greater of (x1) $400,000,000 3.50:1.00 and (2) the First Lien Leverage Ratio at the end of the most recently ended Test Period, (y) 25.0% in the case of Consolidated EBITDA Indebtedness secured by a Lien on the Collateral that ranks junior to the Liens on the Collateral securing the Obligations, the Secured Leverage Ratio does not exceed the greater of 4.50:1.00 and the Parent Borrower for Secured Leverage Ratio at the end of the most recently ended Test Period and (z) in the case of Indebtedness that is unsecured or secured by assets that are not Collateral, either, at the Borrower’s option, (X) the Total Leverage Ratio does not exceed the greater of 4.50:1.00 and the Total Leverage Ratio at the end of the most recently ended Test Period or (Y) the Interest Coverage Ratio is no less than the lesser of 2:00:1.00 and the Interest Coverage Ratio at the end of the most recently ended Test Period and (iii) incurred for any one time outstanding purpose not prohibited by this Agreement, in an aggregate principal amount for clause (iii), not to exceed an unlimited amount so long as after giving Pro Forma Effect thereto (x) in the case of Indebtedness secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Obligations, the First Lien Leverage Ratio does not exceed 3.00:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 3.50:1.00 and the First Lien Leverage Ratio at the end of the most recently ended Test Period), (y) in the case of Indebtedness secured by a Lien on the Collateral that ranks junior to the Liens on the Collateral securing the Obligations, the Secured Leverage Ratio does not 4.50:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 4.50:1.00 and the Secured Leverage Ratio at the end of the most recently ended Test Period) and (z) in the case of Indebtedness that is unsecured or secured by assets that are not Collateral, either, at the Borrower’s option (X) the Total Leverage Ratio does not exceed 4.50:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the greater of 4.50:1.00 and the Total Leverage Ratio at the end of the most recently ended Test Period) or (Y) the Interest Coverage Ratio is no less than 2:00:1.00 (or, to the extent such Indebtedness is incurred in connection with any acquisition or similar investment not prohibited by this Agreement, the lesser of 2.00:1.00 and the Interest Coverage Ratio at the end of the most recently ended Test Period); provided that, such Indebtedness (other than unsecured Indebtedness) incurred under clauses (ii) and (iii) (1) shall be subject only to the applicable Required Debt Terms, (2) (I) any Permitted Refinancing such Indebtedness of any Subsidiaries that are non-Loan Parties incurred under the ratios specified in clause (ii)(B) (when taken together with any Indebtedness incurred by non-Loan Parties under clause (iii) of this Section 7.03(r) and Section 7.03(aa)) shall not exceed, at the time of the incurrence thereof, the greater of (X) $358,000,000 and (Y) 55.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period) and (II) any such Indebtedness of any Subsidiaries that are not Loan Parties incurred under the ratios specified in clause (iii) shall not exceed (when taken together with any Indebtedness incurred by non-Loan Parties under clause (ii) of this Section 7.03(r) and Section 7.03(aa)), at the time of the incurrence thereof, the greater of (X) $358,000,000 and (Y) 55.0% of Consolidated EBITDA as of the last day of the most recently ended Test Period and (3) in the case of any such Indebtedness in the form of Qualifying Term Loans incurred in reliance on clauses (ii)(B)(x) or (iii)(x), shall be subject to the MFN Provisions;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by any Non-Loan Party, (x) in an aggregate principal amount not to exceed exceed, at the time of the incurrence thereof, the greater of (Ai) $600,000,000 130,000,000 and (ii) 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period and (y) under working capital lines, lines of credit or overdraft facilities (to the extent such Indebtedness are not secured by assets constituting Collateral and are non-recourse to the Loan Parties) in an aggregate principal amount not to exceed, at the time of the incurrence thereof, the greater of (i) $65,000,000 and (ii) 10% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(t) Incremental Equivalent Debt and any one time outstanding plus Permitted Refinancing thereof;
(Bu) additional Indebtedness incurred from in an aggregate principal amount not to exceed, at the time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; of the incurrence thereof, the greater of (x) $293,000,000 and (y) 45% of Consolidated EBITDA as of the last day of the most recently ended Test Period;
(v) Indebtedness in an aggregate principal amount not exceeding the Available Amount, provided that (1i) at the time of the incurrence of such Indebtedness made utilizing amounts specified in clause (b) of the definition of “Available Amount”, no Specified Event of Default shall have occurred and be continuing or would result therefrom and (ii) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject only to a borrowing base or similar advance rate criteriathe applicable Required Debt Terms;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers Borrower to the extent that 100% of the Borrowers shall have been permitted Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred the prepayment of Term Loans or the replacement of Revolving Credit Commitments in reliance on, accordance with Section 2.142.05(b)(iii); provided that (A) other than Inside Maturity Loans, such Indebtedness shall not mature earlier than prior to the Maturity Date applicable to of the Term B Loans or Revolving Credit Loans, (B) as applicable, being refinanced and, as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness (other than revolving loans) shall not be shorter than that of the then-remaining Term B LoansLoans being refinanced, (CB) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (DC) subject to clause (h) of the other terms “Collateral and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuanceGuarantee Requirement”, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is not secured by a Lien on the Collateral that is pari passu with the Lien any assets not securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness Obligations unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or assets substantially concurrently guaranteed secure the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing pricing, call protection, premiums and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect shall be either, taken as a whole, no more favorable to the lenders providing such Indebtedness, in their capacity as such or, solely in the case such Indebtedness is refinancing the Term Loans, be on market terms and conditions on at the time of the establishment of such Indebtedness (in each case, as reasonably determined by the Borrower) (except for (x) covenants or other provisions applicable only to periods after the latest maturity date of the relevant Loans being refinanced or (y) to the extent any more restrictive covenant or provision is added for the benefit of (A) with respect to any such Indebtedness incurred as term B loans, such covenant or provision is also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Indebtedness or (B) with respect to any revolving facility or Customary Term A Loans, such covenant or provision (except to the extent only applicable after the maturity date of the Revolving Credit Facility) is also added for the benefit of the Revolving Credit Facility to the extent it remains outstanding after the incurrence of such Indebtedness; it being understood and agreed that in each such case, no consent of the Administrative Agent and/or any Lender shall be required in connection with adding such covenant or provision), and (E) such Indebtedness shall not participate be in mandatory prepayments on a greater than pro rata basis with principal amount in excess of the amount of Term Loans or Revolving Credit Commitments, as applicable, so refinanced except by an amount equal to unpaid accrued interest and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrowerpremium thereon plus other reasonable amounts paid and unused commitments, together and fees and expenses reasonably incurred, in connection with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) such refinancing and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing[reserved];
(y) Indebtedness in respect of Permitted Debt Exchange Notes Securities incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.Refin
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of incurred by any Loan Party pursuant to the Parent Borrower and Term Loan Facility, Indebtedness incurred by any of its Subsidiaries under Loan Party otherwise than pursuant to the Term Loan Facility (including pursuant to any Term Loan Refinancing Indebtedness, New Incremental Indebtedness Documents, any Permitted Debt Exchange Notes or any Rollover Indebtedness but not pursuant to the Loan Documents) and Indebtedness under the Other Letter of Credit Facility in an aggregate principal amount at any time outstanding not to exceed (A) $400,000,000 plus (B) the Maximum New Incremental Indebtedness Amount plus (C) in the case of any Refinancing of such Indebtedness accrued and unpaid interest and premium thereon plus other amounts paid, and fees and expenses incurred in connection with such Refinancing;
(b) Indebtedness of the Borrowers in respect of Loan Parties under the Senior Secured Notes Loan Documents;
(c) Indebtedness outstanding or committed to be incurred on the Closing Date and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 listed on Schedule 7.03 and any Permitted Refinancing thereof;
(cd) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries Guarantees incurred in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any or other obligations of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower Borrowers or any other Restricted Subsidiary otherwise that are permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur to be incurred under this Section 7.03)Agreement; provided that, that if the such Indebtedness being guaranteed or other obligation is subordinated to the Obligations, such any Guarantee Obligation thereof shall be subordinated to the Guarantee of the Obligations on terms at least as no less favorable to the Lenders as those contained in than the subordination terms of such IndebtednessIndebtedness or other obligation (as determined by the Borrower Representative in good faith);
(e) Indebtedness of the Parent Borrower or (A) any Loan Party owing to any other Loan Party, (B) any Restricted Subsidiary owing that is not a Loan Party owed to the Parent Borrower or (1) any other Restricted Subsidiary that is not a Loan Party or (2) any Loan Party, and (C) any Loan Party to the extent constituting an Investment permitted by Section 7.02any Restricted Subsidiary which is not a Loan Party; provided that all such Indebtedness of any Loan Party owed under this clause (e)(C) must be expressly subordinated to any Person that is not a Loan Party shall be the Obligations on the terms of the Intercompany Subordination Agreement or subject to subordination terms substantially identical to the subordination terms set forth in Section 3.01 Exhibit K, in each case within 60 days of the Guarantyincurrence of such Indebtedness or such later date as the Administrative Agent shall reasonably agree, in each case, to the extent permitted by applicable law and not giving rise to materially adverse tax consequences;
(f) Capitalized Lease Obligations; provided that (i) Attributable such Indebtedness is not issued or incurred to acquire Equity Interests of any Person and other Indebtedness (ii) immediately after giving Pro Forma Effect to the issuance or incurrence of such Indebtedness, the Company’s Consolidated Fixed Charge Coverage Ratio shall be no less than 1.00:1.00 and any Permitted Refinancing of such Capitalized Lease Obligations;
(g) (i) Capitalized Lease Obligations set forth on Schedule 7.03, (ii) purchase money obligations (including Capitalized Leasesobligations in respect of mortgage, industrial revenue bond, industrial development bond and similar financings) financing to finance the acquisitionpurchase, construction, repair, replacement repair or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270the limitations set forth in Section 7.01(i) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) in each case, any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)respect thereof; provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to at any time outstanding under clause (ii)) under of this Section 7.03(f7.03(g) does (together with the aggregate amount of all Sale Leaseback transactions outstanding pursuant to Section 7.07) shall not exceed the greater of (x) $350,000,000 15,000,000 and (y) 20.03.00% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodTotal Assets;
(gh) Indebtedness of Restricted Subsidiaries that are Foreign Subsidiaries not to exceed the greater of (i) $5,000,000 and (ii) 1.00% of Consolidated Total Assets, at any time outstanding;
(i) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which incurred in the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect ordinary course of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancenot for speculative purposes;
(hj) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)[Reserved];
(k) (i) Indebtedness representing deferred compensation or stock-based compensation to employees directors, officers, employees, consultants or independent contractors of the Parent Borrower Company and the Restricted Subsidiaries and (ii) Indebtedness consisting of obligations of the Company or the Restricted Subsidiaries under deferred compensation to their directors, officers, employees, consultants or independent contractors or other similar arrangements incurred by such Persons in connection with the Transactions and Permitted Acquisitions or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of businessother Investment expressly permitted under Section 7.02;
(jl) Indebtedness consisting of promissory notes issued by the Company or any Restricted Subsidiary to current or former officers, directors, partners, managers, consultants directors and employees, consultants, independent contractors, their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Company or any direct or indirect parent thereof) Parent Holding Company permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(km) Indebtedness in respect of indemnification, purchase price adjustments or other similar obligations incurred by the Parent Borrower Company or any of its Restricted Subsidiaries Subsidiary in a Permitted Acquisition, any other Investment expressly permitted hereunder Disposition or any DispositionAsset Swap Transaction under agreements which provide for indemnification, in each case to the extent constituting indemnification obligations or obligations in respect adjustment of the purchase price (including earn-outs) or other for similar adjustments;
(ln) Indebtedness consisting of obligations of the Parent Borrower Company or any of its Restricted Subsidiaries Subsidiary under deferred compensation consideration (e.g., earn-outs, indemnifications, incentive non-competes and other contingent obligations) or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions Transactions, or any Permitted Acquisition, Asset Swap Transaction or other Investment expressly permitted hereunderunder Section 7.02;
(mo) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary (or is merged or consolidated with or into the Company or a Restricted Subsidiary) or Indebtedness attaching to assets that are acquired by the Company or any Restricted Subsidiary (including any Indebtedness assumed by the Company or any Restricted Subsidiary in connection with any acquisition of any assets or Person), in each case after the Closing Date as the result of a Permitted Acquisition, Asset Swap Transaction or other Investment permitted by Section 7.02; provided that (i) such Indebtedness is not incurred in contemplation of such acquisition and (ii) on the date of determination, either (x) the Company’s Consolidated Total Net Debt to Consolidated EBITDA Ratio shall be less than or equal to 3.25:1.00 after giving Pro Forma Effect to the assumption of such Indebtedness and the related Specified Transactions, or (y) the Consolidated Total Net Debt to Consolidated EBITDA Ratio of the Company after giving Pro Forma Effect to such assumption of Indebtedness and the related Specified Transactions is less than or equal to the Consolidated Total Net Debt to Consolidated EBITDA Ratio of the Company immediately prior to such assumption of Indebtedness and the related Specified Transactions (it being understood, that in each case, Pro Forma Effect shall be given to the entire committed amount of any such Indebtedness, and such committed amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (ii)), and any Permitted Refinancing of such Indebtedness;
(i) Indebtedness arising under Cash Management Obligations Agreements incurred in the ordinary course of business and other (ii) Indebtedness in respect of netting services, overdraft protections, credit card programs, automatic clearinghouse arrangements, overdraft protections arrangements and similar arrangements in each case incurred in connection with deposit accounts and Indebtedness arising from the ordinary course;
(n) Indebtedness consisting honoring of (a) the financing a bank or other financial institution of insurance premiums a check, draft or (b) take or pay obligations contained in supply arrangements, in each case, similar instrument drawn against insufficient funds in the ordinary course of business;
(oq) Indebtedness incurred by in an aggregate principal amount not to exceed the Parent Borrower or greater of (i) $25,500,000 and (ii) 5.00% of Consolidated Total Assets, at any of its Restricted Subsidiaries time outstanding;
(r) Indebtedness in respect of letters of creditany bankers’ acceptance, bank guarantees, bankers’ acceptancesletter of credit, warehouse receipts receipt or similar instruments issued or created facilities entered into in the ordinary course of business, business (including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims);
(ps) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower Company or any Restricted Subsidiary;
(t) Indebtedness consisting of its Restricted Subsidiaries (a) the financing of insurance premiums or (b) take-or-pay obligations contained in respect of letters of credit, bank guarantees or similar instruments related theretosupply arrangements, in each case case, in the ordinary course of business or consistent with past practicebusiness;
(qu) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit[Reserved];
(rv) (i) other unsecured or junior lien Indebtedness of incurred by the Parent Borrower Company or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of constituting Permitted Additional Debt and any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings Refinancing in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00thereof; provided further that, in that the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to then outstanding in reliance on this clause (rv) and Section 7.03(v) by Non-in respect of which the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan Parties Party shall not exceed the greater of (xi) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding 10,000,000 and (ii) any Permitted Refinancing thereof2.00% of Consolidated Total Assets;
(sw) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof[Reserved];
(x) Indebtedness with respect to any Permitted Receivables Financingsupported by a letter of credit, in a principal amount not in excess of the stated amount of such letter of credit;
(y) Indebtedness of the Company or any Restricted Subsidiary as an account party in respect of trade letters of credit issued in the ordinary course of business;
(z) Guarantees incurred in the ordinary course of business by the Company or any of its Restricted Subsidiaries and not in respect of Indebtedness for borrowed money;
(aa) (i) unsecured Indebtedness in respect of obligations of the Company or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money and (ii) unsecured Indebtedness in respect of intercompany obligations of the Company or any Restricted Subsidiary in respect of accounts payable incurred in connection with goods sold or services rendered in the ordinary course of business and not in connection with the borrowing of money;
(bb) Indebtedness incurred in connection with any Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 Sale Leaseback and any Permitted Refinancing in respect thereof; and;
(zcc) Permitted Disposition Transaction Indebtedness;
(dd) [Reserved];
(ee) [Reserved];
(ff) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03; and
(gg) Indebtedness incurred pursuant to, in contemplation of or in connection with the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify Separation and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 Distribution Agreement and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03Ancillary Agreements.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the GuarantorsSecond Restatement Date set forth on Schedule 9.3(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the Second Restatement Date; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d9.3(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.039.3); provided thatthat (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty, and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness, and (ii) any Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by such Loan Party in such Restricted Subsidiary under Section 9.2(c);
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.029.2; provided that (i) all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth Intercompany Subordination Agreement and (ii) in Section 3.01 the event of any such Indebtedness in respect of the Guarantysale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)improvement and any Permitted Refinancing thereof in an aggregate principal amount pursuant to this sub-clause (i) not to exceed the greater of $110,000,000 and 4.75% of Total Assets, in each case determined at the date of incurrence, (ii) Attributable Indebtedness arising out of sale-leaseback transactions (other than sale-leaseback transactions with respect to any Designated Assets) with respect to properties acquired after the Second Restatement Date and any Permitted Sale Leasebacks Refinancing thereof in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to this sub-clause (ii)) under this Section 7.03(f) does at any time not to exceed the greater of (x) $350,000,000 110,000,000 and (y) 20.04.75% of Consolidated EBITDA Total Assets, in each case determined at the date of the Parent Borrower for the most recently ended Test Periodincurrence, and (iii) Attributable Indebtedness arising out of sale-leaseback transactions with respect to any Designated Assets, and any Permitted Refinancing thereof;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which against Parent, Holdings, the Parent Borrower Borrower’s or any Subsidiary has actual or anticipated Restricted Subsidiary’s exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment commodities pricing risks incurred in the ordinary course of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancenot for speculative purposes and Guarantees thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(ig) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jh) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding9.6;
(ki) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lj) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(mk) Indebtedness in respect of Cash Management Obligations Services, Bank Products and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(nl) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $150,000,000 and 6.50% of Total Assets (determined at the time of incurrence); provided that a maximum of the greater of $58,000,000 and 2.50% of Total Assets (determined at the time of incurrence) in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(m) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(on) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qp) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (Ai) $600,000,000 at any one time outstanding 153,771,192.63 plus (Bii) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets amount of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to Maximum Incremental Amount (as defined in the Term B LoansFacility Credit Agreement as in effect on the Second Restatement Date or, subject to prior consent of the Administrative Agent and the FILO Documentation Agent, as in effect after the Second Restatement Date), (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B LoansPermitted Pari Passu Secured Debt, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligationsunder Secured Hedge Agreements not incurred in violation of Section 9.3(f), (D) the other terms and conditions Cash Management Obligations not incurred in violation of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuanceSection 9.3(k), (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the ObligationsCredit Agreement Refinancing Indebtedness, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) Incremental Exit Loans in an aggregate principal amount not to exceed $10,500,000, and (G) Erroneous Payment Return Deficiency (in the Parent Borrower has delivered to the Administrative Agent a certificate case of a Responsible Officer each of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with foregoing clauses (A), (B), (C), (D) ), (E), (F), and (E) G), as capitalized terms not defined herein are defined in the Term Facility Credit Agreement), in each case, at any time outstanding and in respect of clauses (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”i) and (ii) ), any Permitted Refinancing thereof;
(uq) additional Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the Second Restatement Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in an contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary, other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the Second Restatement Date and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 9.1(p) (and any Permitted Refinancing of the foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause (g)(ii) does not to exceed the greater of (x) $500,000,000 110,000,000 and (y) 30.04.75% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period Total Assets at any one time outstanding;
(vr) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to principal amount of all other Indebtedness of all such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness Foreign Subsidiaries incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”r) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 58,000,000 and (y) 25.02.50% of Consolidated EBITDA Total Assets (determined at the time of the Parent Borrower for the most recently ended Test Period at any one time outstandingincurrence);
(is) Indebtedness (in the form of senior other secured, senior unsecured, senior subordinated, unsecured or subordinated notes or loans) incurred by a Borrower to the extent that 100% Indebtedness of the Net Cash Proceeds therefrom areBorrower or any Restricted Subsidiary (and any Permitted Refinancing thereof), immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that so long as (A) such Indebtedness the Payment Conditions shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinancedhave been satisfied after giving effect thereto, (B) as of the maturity date of the incurrence of such Indebtedness, the and Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that is at least six (6) months after the Latest Maturity Date at the time of then-remaining Term Loans being refinancedincurrence of such Indebtedness, and (C) no Restricted Subsidiary if such Indebtedness is a borrower or guarantor secured, (i) any such Liens with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which any Current Asset Collateral shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered be junior to the Administrative Agent a certificate of a Responsible Officer of Liens securing the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) Obligations and (ii) any Permitted Refinancing thereofsuch Indebtedness is subject to an intercreditor agreement containing terms that are at least as favorable to the Secured Parties as those contained in the Intercreditor Agreement;
(xt) Indebtedness with respect to any Permitted Receivables Financing[Reserved];
(yu) Indebtedness in respect of letters of credit issued for the account of any of the Subsidiaries of Holdings to finance the purchase of Inventory so long as (x) such Indebtedness is unsecured, and (y) the aggregate principal amount of such Indebtedness does not exceed the greater of $81,000,000 and 3.50% of Total Assets at any time;
(v) Indebtedness (i) of any Person that becomes a Restricted Subsidiary after the Second Restatement Date, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to the Borrower, Holdings or any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the date such Person becomes a Restricted Subsidiary after the Second Restatement Date) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 9.1(p) and, in each case, any Permitted Debt Exchange Notes Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary incurred pursuant to a or assumed in connection with any Permitted Debt Exchange in accordance with Acquisition that is secured only by Liens permitted under Section 2.17 9.1(p) (and any Permitted Refinancing thereofof the foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to clause (v)(ii) does not exceed $70,000,000; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yv) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the above clauses; provided that all Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness outstanding under incurred pursuant to the Loan Documents will Term Facility (and any Permitted Refinancing thereof) may only be deemed incurred pursuant to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.039.3(p).
Appears in 1 contract
Sources: Credit Agreement (JOANN Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein, (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (C) any Guarantee by a Restricted Subsidiary that is not a Loan Party of any Permitted Ratio Debt or Indebtedness under Section 7.03(g) or (m) (or any Permitted Refinancing in respect thereof) shall only be permitted if such Guarantee meets the requirements of clauses (s), (g) or (m), as the case may be, of this Section 7.03;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note constitutes a negotiable instrument and is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, constructionlease or improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $15,000,000 and 20% of LTM EBITDA, repair, replacement or improvement), in each case AMERICAS 94626185 determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale‑leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation such Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Restricted Subsidiary (i) entered into to hedge or mitigate risks to which the Parent Borrower assumed in connection with any Permitted Acquisition (provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition) or any Permitted Refinancing thereof or (ii) incurred to finance any Permitted Acquisition or any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption or incurrence of such Indebtedness, as applicable, the aggregate amount of such Indebtedness does not exceed (x) $50,000,000, plus (y) any additional amount of such Indebtedness so long as the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation) is no greater than 5.50 to 1.00, and, (I) if such Indebtedness is designated as “Additional First Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement, the Consolidated First Lien Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured or secured on a junior lien basis to the Term Loans as at all times being secured on a first priority basis (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above or the Consolidated Total Secured Net Leverage Ratio described in subclause (II) below, as the case may be, at the time of the incurrence of such refinancing Indebtedness)) is no greater than 3.75 to 1.00 or (II) if such Indebtedness is designated as “Additional Second Lien Debt” under (and as defined in) the Closing Date Intercreditor Agreement and the Consolidated Total Secured Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.09 and without netting the cash proceeds of any such Indebtedness for the purposes of such calculation and treating all refinancing Indebtedness in respect of such Indebtedness that is unsecured as at all times being secured on a junior lien basis to the Facilities (unless the Borrower complies with the Consolidated Total Net Leverage Ratio described in preceding clause (y) above at the time of the incurrence of such refinancing Indebtedness) is no greater than 4.50 to 1.00, in each case determined on a Pro Forma Basis; provided that in the case of clause (y), any such Indebtedness assumed or incurred by a Restricted Subsidiary has actual that is not a Loan Party (together with any Indebtedness assumed or anticipated exposure incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(s) and (u) (and any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party)) does not exceed in the aggregate at any time outstanding the greater of $50,000,000 and 50% of LTM EBITDA, in each case determined at the time of assumption or incurrence; provided, further, that in the case of clause (ii), (A) such Indebtedness does not have a Weighted Average Life to Maturity less than the remaining Weighted Average Life to Maturity of any then outstanding Term Loans and meets the Permitted Other Debt Conditions, (B) no Event of Default shall exist or result therefrom (other than those in respect a Permitted Acquisition or a permitted Investment made pursuant to a legally binding commitment entered into a that time when no Event of shares of capital stock Default exists or other equity ownership interests of the Parent Borrower or any Subsidiarywould result therefrom), (iiC) entered into such Indebtedness shall be in order to effectively capthe form of (x) one or more series of notes which may be unsecured, collar secured on a junior lien basis with the Facilities or exchange interest rates secured on a pari passu basis with the Facilities or (from fixed to floating rates, from y) one floating rate to another floating rate or otherwise) more series of loans which may be unsecured or secured on a junior lien basis with respect to the Facilities, (D) in no event will any interest-bearing liability or investment such Indebtedness incurred by a Loan Party be permitted to be mandatorily prepaid prior to the repayment in full of the Parent Borrower or Initial Term Loans, except (in AMERICAS 94626185 the case of any Subsidiary such Indebtedness secured on a pari passu basis with the Facilities only) if accompanied by at least a ratable payment of the Initial Term Loans and (iiiE) entered into the terms of any such Indebtedness that are not substantially identical to hedge commoditiesthe then existing Loans shall be no less favorable (taken as a whole) to the Lenders under the then existing Loans than those applicable to the then existing Loans or otherwise reasonably acceptable to the Administrative Agent (except for (x) covenants or other provisions applicable only to periods after the Maturity Date of the Initial Term Loans existing at the time of incurrence of such Indebtedness and (y) any financial maintenance covenant to the extent such covenant is also added for the benefit of the Initial Term Loan Lenders hereunder) or reflect market terms on the date of issuance, currencies, general economic conditions, raw materials prices, revenue streams or business performanceas determined by the Borrower;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 7.06; provided that such Indebtedness shall be subordinated in an aggregate amount not right of payment to exceed $20,000,000 at any one time outstandingthe Obligations on terms reasonably satisfactory to the Administrative Agent;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder (including through a merger) or any DispositionDisposition permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business, so long as such Indebtedness is extinguished in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $25,000,000 and 35% of LTM EBITDA determined at the time of incurrence;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or pay take‑or‑pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance self‑insurance or other Indebtedness with respect to reimbursement-type reimbursement‑type obligations regarding workers workers’ compensation claims;; AMERICAS 94626185
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) letters of credit issued in a currency other than Dollars or an Approved Alternate Currency in an aggregate amount at any time outstanding not to exceed $2,000,000;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(u) and then outstanding for all such Persons taken together and all Indebtedness assumed or incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(g) in reliance on clause (y) thereof and Section 7.03(s) (iand any Permitted Refinancing of the foregoing, to the extent assumed or incurred by a Restricted Subsidiary that is not a Loan Party), does not exceed the greater of $50,000,000 and 50% of LTM EBITDA determined at the time of incurrence;
(v) other unsecured or junior lien Indebtedness of the Parent Borrower or and its Restricted Subsidiaries in respect of seller financing and any Restricted Subsidiary Permitted Refinancing in respect thereof in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 7,500,000 at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriaoutstanding;
(i) Indebtedness under the Second Lien Credit Agreement (including any Second Lien Incremental Term Loans under and pursuant to, and in accordance with the terms of, the Second Lien Credit Agreement), (ii) any Second Lien Incremental Equivalent Debt, (iii) any Second Lien Credit Agreement Refinancing Indebtedness, (iv) any Second Lien Permitted Debt Exchange Notes and (v) any Permitted Refinancing in respect of any of the foregoing Indebtedness (other than Second Lien Credit Agreement Refinancing Indebtedness);
(x) Indebtedness in an amount equal to 100% of the Net Proceeds received by Holdings since immediately after the Closing Date from the issue or sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than proceeds of Disqualified Equity Interests, the Cure Amount or sales of Equity Interests to Holdings or any of its Subsidiaries) to the extent such Net Proceeds or cash have been contributed, directly or indirectly, to common equity capital of the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 (and do not otherwise increase the Cumulative Credit or the Excluded Contribution and are not used to fund Equity Funded Employee Plan Costs) (“Contribution Indebtedness”); provided that such Indebtedness is designated as “Contribution Indebtedness” in a certificate from a Responsible Officer of the Borrower on the date incurred;
(y) (i) Indebtedness in the form of senior secured, senior (x) one or more series of notes which may be unsecured, senior subordinated, secured on a junior lien basis with the Facilities or subordinated notes secured on a pari passu basis with the Facilities or loans(y) one or more series of loans which may be unsecured or secured on a junior lien basis with respect to the Facilities incurred by the Borrowers Borrower to the extent that the Borrowers Borrower shall have been permitted to incur such Indebtedness pursuant to, to and such Indebtedness shall be deemed to be incurred in reliance on, on Section 2.142.14(d)(iv); provided that (A) such AMERICAS 94626185 Indebtedness shall not mature earlier than the Maturity Date applicable to the Initial Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Initial Term B Loans, (C) no Restricted Subsidiary Person is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary Person is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed Guaranteed the Obligations, (D) such Indebtedness shall not be secured by any Lien on any property or asset that does not constitute Collateral securing the Facilities, (E) in no event will any Incremental Equivalent Debt be permitted to be mandatorily prepaid prior to the repayment in full of the Initial Term Loans, except (in the case of Incremental Equivalent Debt secured on a pari passu basis with the Facilities only) if accompanied by at least a ratable payment of the Initial Term Loans and (F) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, issuance (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested determined by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (EBorrower) (such Indebtedness incurred pursuant to this clause (ty)) being referred to as “Permitted Alternative Incremental Facilities Equivalent Debt”) and (ii) any Permitted Refinancing thereof;
(uz) additional Indebtedness [reserved];
(aa) obligations in respect of Disqualified Equity Interests in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.2,
Appears in 1 contract
Sources: First Lien Credit Agreement (Jason Industries, Inc.)
Indebtedness. CreateNone of the Borrower and the Restricted Subsidiaries shall directly or indirectly create, incur, assume or suffer to exist any Indebtedness, except:
(a) (i)(A) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments and Secured Loan Document Hedge Obligations and (B) Indebtedness constituting NDB Revolving Obligations, the revolving commitments in respect of which shall not exceed an aggregate outstanding principal amount of $100,000,000 at any time, and (ii) Term Obligations the loans in respect of which shall not exceed an aggregate outstanding principal amount at any time of the sum of (A) $1,725,000,000 plus (B) the Permitted Incremental Availability Amount; provided that Term Obligations shall (x) be subject to the Collateral Agency and Intercreditor Agreement, (y) not be incurred by a non-Loan Party or guaranteed by a Person that is not a Guarantor unless such Person also guarantees the Obligations and (z) not be secured by assets that do not constitute Collateral;
(bi) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (First Amendment Effective Date and Guarantees thereof by the Guarantorslisted on Schedule 7.3(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the First Amendment Effective Date and any refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (i) no Guarantee of any Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (ii) if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.027.2; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of (x) $70,000,000 and (y) 35% of LTM Consolidated EBITDA (after giving effect to any concurrent Investments), construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period sale-leaseback transactions permitted by Section 7.5(l), and (iii) any Permitted Refinancing of any of the foregoing;
(f) Indebtedness set forth in respect of Hedging Transactions designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or other commodity pricing risks incurred in the immediately preceding clauses ordinary course of business and not for speculative purposes;
(ig) Indebtedness of the Borrower or any Restricted Subsidiary that is a Loan Party incurred or assumed in connection with any Permitted Acquisition, and (ii)any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the incurrence or assumption of such Indebtedness, the aggregate principal amount of such Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) at any time outstanding does not exceed the greater of (xi) $350,000,000 70,000,000 and (yii) 20.035% of LTM Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
EBITDA; provided, further, that any Indebtedness incurred (but not assumed) pursuant to this clause (g) Indebtedness shall be subject to the requirements included in respect the first proviso under the definition of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance“Permitted Ratio Debt”;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, managers, consultants, directors, partners, managers, consultants and employees, their respective estates, spouses spouses, or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.6;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other connection with an Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment Investments expressly permitted hereunder;
(ml) Cash Management Obligations cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount at any time outstanding that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of (i) $95,000,000 and (ii) 45% of LTM Consolidated EBITDA at such time (after giving effect to any concurrent Investments), together with any Permitted Refinancing thereof;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability disability, or other employee benefits or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within thirty (30) days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal appeal, and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit the Borrower and/or any Subsidiary Guarantor in respect of one or more series of senior secured loans or notes (whether issued in a principal amount not to exceed public offering, under Rule 144A of the face amount Securities Act or in another private placement or otherwise) (and including any bridge financings in lieu of such Letter notes), junior secured or unsecured “mezzanine” loans or notes or senior unsecured or subordinated loans or notes, in each case, pursuant to an indenture, interim agreement, loan agreement, syndicated credit agreement, note purchase agreement or otherwise and any extensions, renewals, refinancings and replacements thereof, including in the case of Credit;
any such notes, any Registered Equivalent Notes (r) the “Incremental Equivalent Debt”); provided that (i) other unsecured any such Incremental Equivalent Debt that is secured shall not be secured by any property or junior lien Indebtedness assets of Holdings, the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed other than the Collateral securing the Obligations, (Aii) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause Incremental Equivalent Debt secured on a pari passu basis with the Loans (r“Incremental Equivalent First Lien Debt”), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 days(without giving effect to any prior payments that would otherwise modify such Weighted Average Life to Maturity) and, in the case of Incremental Equivalent Debt that is secured on a junior lien basis with the Loans or is unsecured (“Incremental Equivalent Junior Lien Debt”), shall not be subject to scheduled amortization prior to maturity; provided that the foregoing requirements of this clause (ii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the First Amendment Effective Date) or any facility in respect thereof, (2iii) such Indebtedness shall not in the case of Incremental Equivalent First Lien Debt, have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to a maturity date that is after the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions Revolving Commitment Termination Date at the time of incurrence or issuance of such Indebtedness is incurred, and in the case of Incremental Equivalent Junior Lien Debt, have a maturity date that is at least ninety-one (491) days after the Latest Maturity Date (as defined in the Term Credit Agreement as of the First Amendment Effective Date) at the time such Indebtedness is incurred; provided that the foregoing requirements of this clause (iii) shall not apply to the extent such Indebtedness constitutes Extendable Bridge Loans (as defined in the Term Credit Agreement as of the First Amendment Effective Date) or any facility in respect thereof, (iv) the maximum aggregate outstanding principal amount of all Incremental Equivalent Debt incurred in accordance with this Section 7.3(q), together with the aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties all Incremental Commitments shall not exceed the greater of Permitted Incremental Availability Amount, (xv) $400,000,000 and the security agreements, if applicable, relating to such Indebtedness are substantially the same as the Collateral Documents (y) 25.0% of Consolidated EBITDA of with such differences as are reasonably satisfactory to the Parent Borrower for the most recently ended Test Period at any one time outstanding and Administrative Agent), (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1vi) such Indebtedness is secured not guaranteed by Liens on any Person other than the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral)Guarantors, (2vii) Loan Parties shall not Guarantee if such Incremental Equivalent Debt is secured, the Other Debt Representative acting on behalf of the holders of such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02shall have become party to the Collateral Agency and Intercreditor Agreement and/or Junior Lien Intercreditor Agreement, and as applicable, (3viii) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the case of Incremental Equivalent First Lien Debt in the form of senior securedterm loans, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers be subject to the extent that MFN Protection (as defined in the Borrowers shall have been permitted to incur Term Credit Agreement on the date hereof) as if such Indebtedness pursuant towere Permitted Incremental Term Loans, (ix) after giving effect to incurrence of Incremental Equivalent Debt, no Event of Default shall exist and be continuing or would immediately result from incurrence of such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14Incremental Equivalent Debt or from the application of the proceeds therefrom; provided that if the proceeds of such Incremental Equivalent Debt are being used to finance a Permitted Acquisition, Investment, or irrevocable repayment, repurchase or redemption, there shall be no requirement to satisfy any or all conditions set forth in this clause (Aix) such Indebtedness shall not mature earlier than except that the Maturity Date applicable requirement that no Event of Default under Section 8.1(a), (b), (g) or (i) with respect to the Term B Loans, (B) as of the date of Borrower shall have occurred and be continuing or would exist after giving effect to the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness Incremental Equivalent Debt shall not be shorter than that omitted or waived without the consent of the Term B LoansRequired Lenders, (Cx) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms except as otherwise set forth in the proviso to this Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A7.3(q), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness Incremental Equivalent Debt shall be customary as of the date of incurrence of such Incremental Equivalent Debt and (excluding pricing xi) subject to clauses (ii), (iii) and (viii) above, the amortization, pricing, rate floors, discounts, fees, premiums, and optional prepayment or redemption terms or covenants or other and redemptions provisions applicable only to periods after such Incremental Equivalent Debt shall be determined by the maturity date Borrower and the holders of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerIncremental Equivalent Debt, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Revolving Credit Agreement (WaterBridge Infrastructure LLC)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness of the Borrowers (including any unused commitment in respect of thereof) outstanding on the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted in Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated in right of payment to the Obligations pursuant to the Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee by any Restricted Subsidiary of the 2029 Notes or any Indebtedness constituting Permitted Ratio Debt or a Junior Financing of any Loan Party shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable (as reasonably determined by the Borrower) to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary), provided that, in the extent constituting case of Indebtedness of a non-Loan Party owing to a Loan Party, such Indebtedness is an Investment permitted by Section 7.02; provided further that (x) no such Indebtedness owed to a Loan Party shall be evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated in right of payment to the Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, constructionlease or improvement of the applicable asset thereof in an aggregate amount not to exceed the greater of $141,750,000 (or, repairafter completion of the MMT Acquisition, replacement or improvement)$162,000,000) and 45.0% of Trailing Four Quarter Consolidated EBITDA, in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation such Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed in connection with any Permitted Acquisition or other similar Investment permitted hereunder; provided that (i) entered into to hedge such Indebtedness is not incurred in contemplation of such Permitted Acquisition or mitigate risks to which the Parent Borrower other similar Investment permitted hereunder or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary)Permitted Refinancing thereof, (ii) entered into in order any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to effectively cap, collar or exchange interest rates clause (from fixed to floating rates, from one floating rate to another floating rate or otherwiseii) with respect to any interest-bearing liability or investment of the Parent Borrower or definition of “Permitted Ratio Debt”, does not exceed in the aggregate at any Subsidiary time outstanding the greater of $47,250,000 (or, after completion of the MMT Acquisition, $54,000,000) and 15.0% of Trailing Four Quarter Consolidated EBITDA determined at the time of incurrence and (iii) entered into the obligors with respect to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams such Indebtedness are limited to the Persons acquired in such Permitted Acquisition or business performanceInvestment;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries Subsidiary incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any Restricted Subsidiary to current or former managers, officers, directors, partners, managers, consultants and or employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries Subsidiary in a Permitted Acquisition, any other Investment expressly permitted hereunder hereunder, merger or any DispositionDisposition permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price adjustments or other similar adjustments (including earn-outs) or other similar adjustmentsouts and seller notes);
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) (i) Secured Cash Management Obligations and Obligations, (ii) other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections Cash Management Services and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof, (iii) Indebtedness resulting from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business and solely with respect to each incurrence pursuant to this clause (iii), so long as such Indebtedness is extinguished within 10 Business Days of its incurrence, and (iv) endorsement of instruments or other payment items for deposit in the ordinary course of business;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $283,500,000 (or, after completion of the MMT Acquisition, $324,000,000) and 90.0% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09);
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries Subsidiary in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) to extent constituting Indebtedness, obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case case, in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) letters of credit in an aggregate amount at any time outstanding not to exceed the greater of $23,625,000 (or, after completion of the MMT Acquisition, $27,000,000) and 7.5% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) consisting of (i) letters of credit issued in currencies not available hereunder or (ii) commercial letters of credit not issued hereunder;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) Permitted Ratio Debt and any Permitted Refinancing thereof;
(it) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(u) and then outstanding for all such Persons taken together, does not exceed the greater of $236,250,000 (or, after completion of the MMT Acquisition, $270,000,000) and 75.0% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09), in each case determined at the time such Indebtedness was incurred;
(v) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to the Borrower or any of the Restricted Subsidiaries;
(w) to the extent a joint venture constitutes a Restricted Subsidiary, Indebtedness incurred by such Restricted Subsidiary which, when aggregated with the principal amount of all other Indebtedness incurred pursuant to this Section 7.03(w) and then outstanding for all such Persons taken together, does not exceed the greater of $47,250,000 (or, after completion of the MMT Acquisition, $54,000,000) and 15.0% of Trailing Four Quarter Consolidated EBITDA (determined on a Pro Forma Basis in accordance with Section 1.09) determined at the time of incurrence;
(x) Indebtedness existing on the Closing Date under the 2029 Notes Indenture, and any Permitted Refinancing thereof, in an aggregate principal amount not to exceed $675,000,000, and Guarantees thereof by the Guarantors;
(y) unsecured Indebtedness in an amount equal to the lesser of 100% of the net cash proceeds received by Holdings since immediately after the Closing Date from the issue or junior lien sale of Equity Interests of Holdings or cash contributed to the capital of Holdings (in each case, other than proceeds of Disqualified Equity Interests or sales of Equity Interests to Holdings or any of its Subsidiaries) to the extent such net cash proceeds or cash have been contributed to the Borrower and have not been applied pursuant to Section 7.02, 7.06 or 7.13 and do not constitute Cure Amounts;
(z) Indebtedness of the Parent Borrower or any Restricted Subsidiary that is a Loan Party incurred to finance or assumed in connection with an acquisition of any assets (including Equity Interests), business or Person (and any Permitted Refinancings thereof) in an aggregate principal amount that does not to exceed $65,000,000 at any one time outstanding (A) $1,000,000,000 at the time of it being understood that any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (Az) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured shall cease to be deemed incurred, issued or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred outstanding pursuant to this clause (rz) but shall be deemed incurred or issued and outstanding as Permitted Ratio Debt under Section 7.03(v7.03(s) by Non-from and after the first date on which the Borrower or its Restricted Subsidiary, as the case may be, could have incurred such Indebtedness as Permitted Ratio Debt under Section 7.03(s) (to the extent the Borrower or such Restricted Subsidiary is able to incur any Liens related thereto as L▇▇▇▇ permitted hereunder after such reclassification)); and;
(aa) unsecured Indebtedness of the Borrower or any Restricted Subsidiary that is a Loan Parties shall Party in the form of ESG (environmental, social and corporate governance) bonds (and any Permitted Refinancings thereof) in an aggregate principal amount that does not exceed the greater of (x) $400,000,000 141,750,000 (or, after completion of the MMT Acquisition, $162,000,000) and (y) 25.045.0% of Trailing Four Quarter Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by determined on a Non-Loan Party, and guarantees thereof by Non-Loan Party, Pro Forma Basis in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateralaccordance with Section 1.09), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than (it being understood that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such any Indebtedness incurred pursuant to this clause (taa) being referred shall cease to be deemed incurred, issued or outstanding pursuant to this clause (aa) but shall be deemed incurred or issued and outstanding as “Permitted Alternative Incremental Facilities Debt”Ratio Debt under Section 7.03(s) from and after the first date on which the Borrower or its Restricted Subsidiary, as the case may be, could have incurred such Indebtedness as Permitted Ratio Debt under Section 7.03(s) (ii) to the extent the Borrower or such Restricted Subsidiary is able to incur any Permitted Refinancing thereofLiens related thereto as Liens permitted hereunder after such reclassification));
(ubb) additional Indebtedness obligations in respect of Disqualified Equity Interests (x) issued to and held by the Borrower, Holdings or any Restricted Subsidiary (to the extent permitted by Section 7.02) or (y) in an aggregate principal amount not to exceed the greater of $15,750,000 (xor, after completion of the MMT Acquisition, $18,000,000) $500,000,000 and (y) 30.05.0% of Trailing Four Quarter Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period (determined on a Pro Forma Basis in accordance with Section 1.09) at any one time outstanding;; and
(vcc) Indebtedness incurred to finance redeem, repurchase or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as retire shares of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien Company Preferred Stock outstanding on the Collateral that is pari passu with Original Closing Date if, as and when required by the Lien securing terms thereof in effect on the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant toOriginal Closing Date, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and as permitted by the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.Agreement;
Appears in 1 contract
Indebtedness. CreateNone of Holdings, the Borrower or any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness (i) outstanding on the Closing Date (provided that with respect to any Indebtedness in excess of $1,000,000 individually and $5,000,000 in the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantorsaggregate, such Indebtedness will only be permitted under this Section 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 if listed on Schedule 7.03(b)) and any Permitted Refinancing thereofrefinancing thereof and (ii) Indebtedness of Holdings to any Subsidiary of Holdings and of any Subsidiary of Holdings to Holdings or any other Subsidiary of Holdings; provided that, other than in the case of intercompany current liabilities incurred in the ordinary course of business in connection with cash management, tax and accounting operations of Holdings and its Subsidiaries, (x) Indebtedness of any Subsidiary of Holdings that is not a Loan Party owing to a Loan Party shall be (A) subject to Section 7.02 and (B) evidenced by an Intercompany Note and (y) any Indebtedness of any Loan Party to a Subsidiary of Holdings that is not a Loan Party shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(c) (i) Indebtedness of the Parent Borrower Guarantees by Holdings and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower Holdings or any Restricted Subsidiary of Holdings otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee of the Senior Notes or any Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower Holdings or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all no such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject evidenced by a promissory note unless such note is pledged as Collateral to secure the subordination terms set forth in Section 3.01 of the GuarantyObligations;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing to finance the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of the assets or the Capital Stock of any Person owning such assets) by Holdings or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset in an aggregate amount not to exceed the greater of $30,000,000 and 1.5% of Total Assets (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts that are incurred in the ordinary course of business (iand not for speculative purposes): (A) entered into to hedge for the purpose of fixing or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange hedging interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) risk with respect to any interest-bearing liability Indebtedness that is permitted to be incurred under Section 7.03; (B) for the purpose of fixing or investment hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;
(g) Indebtedness of Holdings or any Restricted Subsidiary (A) existing at the time such Person was acquired or contributed; provided that such Indebtedness is not incurred in contemplation of such acquisition or contribution, and any Permitted Refinancing thereof or (B) incurred to finance a Permitted Acquisition and any Permitted Refinancing thereof; provided that (w) in the case of clauses (A) and (B), such Indebtedness and all Indebtedness resulting from a Permitted Refinancing thereof is unsecured (except for Liens permitted by Section 7.01(v) securing Indebtedness (together with Permitted Refinancings thereof) incurred pursuant to clause (A) in an aggregate principal outstanding not to exceed $50,000,000 (other than such Indebtedness that is repaid in full or otherwise extinguished substantially concurrently with such acquisition or when such Person becomes a Restricted Subsidiary) and Liens securing Indebtedness incurred pursuant to clause (A) permitted by Section 7.01(aa)), (x) in the case of clauses (A) and (B), both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom (other than a Permitted Acquisition made pursuant to a legally binding commitment entered into at a time when no Default exists or would result therefrom), (2) the Borrower and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenants in Section 7.10(a) and (b) and (3) the Total Leverage Ratio shall not be greater than 4.50 to 1.0 determined on a Pro Forma Basis as of the Parent Borrower or any Subsidiary last day of the most recently ended Test Period and (iiiy) entered into to hedge commoditiesin the case of any such incurred Indebtedness under clause (B), currenciessuch Indebtedness matures after, general economic conditionsand does not require any scheduled amortization or other scheduled payments of principal prior to, raw materials pricesthe seventh anniversary of the Closing Date; provided, revenue streams or business performancefurther, that the amount of Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties under this Section 7.03(g) shall not exceed $50,000,000 in the aggregate;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (Holdings or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower Holdings or any of its Restricted Subsidiaries arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the extent constituting indemnification obligations or obligations in respect purpose of purchase price (including earn-outs) or other similar adjustmentsfinancing such acquisition;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(mA) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangementsarrangements or (B) Indebtedness arising from the honoring of a bank or other financial institution of a check, overdraft protections and draft or similar arrangements in each case incurred instrument drawn against insufficient funds in the ordinary coursecourse of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(m) Indebtedness of Holdings or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $75,000,000 and 3.75% of Total Assets;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower Holdings or any of its Restricted Subsidiaries in constituting reimbursement obligations with respect of to letters of credit, credit and bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments guarantees issued or created in the ordinary course of business, including without limitation letters of credit in respect of workers workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;
(p) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower Holdings or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicebusiness;
(q) Indebtedness constituting the Senior Notes and any Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit or bank guarantee, in a principal amount not in excess of the stated amount of such Letter of Credit or bank guarantee;
(i) Permitted Notes in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14, not to exceed $275,000,000; provided that (A) both at the time of any such incurrence (and after giving effect thereto), no Event of Default shall exist, (B) Holdings and the Borrower shall be in compliance with the covenants set forth in Section 7.10(a) and (b) determined on a Pro Forma Basis as of the date of the most recently ended Test Period as if Permitted Notes had been outstanding on the last day of such fiscal quarter of the Borrower for testing compliance therewith and (C) the Secured Leverage Ratio shall not be greater than 2.75 to 1.0 determined on a Pro Forma Basis as of the last four quarters ended as if such Permitted Notes had been outstanding on the last day of such fiscal quarter of Holdings and the Borrower for testing compliance therewith, (ii) Permitted Notes, the Net Proceeds of which are applied to the permanent repayment of Term Loans pursuant to Section 2.05(b)(iii), (iii) Permitted Notes that are offered on a pro rata basis to all Lenders that are “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended) holding Term Loans and in a principal amount not to exceed the face amount of Term Loans exchanged for such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence Permitted Notes pursuant to this clause procedures reasonably acceptable to the Administrative Agent (A) (when aggregated including procedures designed to comply with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00securities laws); provided further thatthat any Term Loans exchanged for such Permitted Notes shall be deemed to have been repaid immediately upon the effectiveness of such exchange, and (iv) in the case of any Indebtedness Permitted Notes incurred under this clause any of the foregoing clauses (ri), (1ii) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any iii), Permitted Refinancing Refinancings thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (ys) above;
(u) Indebtedness of a joint venture to Holdings or any other Loan Party and to the other holders of Equity Interests of such joint venture, so long as the percentage of the aggregate amount of such Indebtedness of such joint venture owed to such other holders of its Equity Interests does not exceed the percentage of the aggregate outstanding amount of the Equity Interests of such joint venture held by such other holders; provided, that any such Indebtedness owed to Holdings or any other Loan Party shall be evidenced by a promissory note in form and substance satisfactory to the Administrative Agent and shall be pledged and delivered (together with all collateral or other security securing such promissory note) to the Administrative Agent pursuant to the Collateral Documents;
(v) Indebtedness incurred by Foreign Subsidiaries to third parties other than Holdings or any of its Subsidiaries in an aggregate principal amount not to exceed the greater of $25,000,000 and 10% of total assets of all Foreign Subsidiaries at the time of such incurrence at any time outstanding and any Permitted Refinancing thereof;
(w) Indebtedness under the Foreign L/C Facility in an aggregate principal amount not to exceed $100,000,000 at any time outstanding; provided that only up to $50,000,000 of such Indebtedness may be recourse to Holdings, but shall not be secured by a Lien on the assets of Holdings and any Permitted Refinancing thereof; and
(x) Indebtedness of Holdings or any Restricted Subsidiary; provided that (i) the Borrower shall be in compliance with a Total Leverage Ratio at least 0.50 times lower than the Total Leverage Ratio for the applicable period set forth in Section 7.10(a) (i.e. if the required ratio in Section 7.10(a) is 3.00 to 1.0 the requirement to incur Indebtedness under this clause (x) shall be 2.50 to 1.0), (ii) the Secured Leverage Ratio shall not be greater than 2.50 to 1.0, in each case, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period and (iii) any Indebtedness incurred pursuant to this Section 7.03(x) shall (a) mature or be mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments) after the Maturity Date of the Term Loans, (b) not be redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zt) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 7.03, and (ii) all Indebtedness constituting the Senior Secured Notes will be deemed to have been incurred be outstanding in reliance only on the exception set forth in clause (cq) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (date hereofRestatement Effective Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the date hereofRestatement Effective Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an intercompany note and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an intercompany note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d7.03(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided thatthat (A) no Guarantee by any Restricted Subsidiary of any High Yield Note, the Unsecured Term Loan, any Subordinated Lien Facility or any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be unsecured and subject to the subordination terms set forth in Section 3.01 5.03 of the GuarantySecurity Agreement;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two three hundred seventy and sixty-five (270365) days after the applicable acquisition, construction, repair, replacement or improvementimprovement in an aggregate amount at any one time not to exceed the greater of $150,000,000 and 5.0% of Total Assets (together with any Permitted Refinancings thereof), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness assumed in connection with any Permitted Acquisition, provided that (x) such Indebtedness (i) entered into to hedge or mitigate risks to which the Parent Borrower or was not incurred in contemplation of such Permitted Acquisition and any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary)Permitted Refinancing thereof, (ii) entered into is secured only by the assets acquired in order to effectively capthe applicable Permitted Acquisition (including any acquired Equity Interests), collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwiseiii) the only obligors with respect to any interest-bearing liability Indebtedness incurred pursuant to this clause (g) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition and (y) both immediately prior and after giving effect thereto no Default shall exist or investment result therefrom;
(i) Indebtedness (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) of the Parent Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition and (iiiii) entered into any Permitted Refinancing of the foregoing; provided, that in the case of each of (i) and (ii) above, such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to hedge commoditiesthe Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Restatement Effective Date or as otherwise reasonably satisfactory to the Administrative Agent, currencies(x) both immediately prior and after giving effect thereto no Default shall exist or result therefrom, general economic conditions(y) matures after, raw materials pricesand does not require any scheduled amortization or other scheduled payments of principal prior to, revenue streams the Latest Term Loan Maturity Date of the Term Loans and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Restatement Effective Date or business performance;
as otherwise consistent with the market for such Indebtedness; provided that notwithstanding anything contained in the Loan Documents to the contrary, (a) the only obligors with respect to any Indebtedness incurred pursuant to clause (A) of this paragraph or any Permitted Refinancing of Indebtedness in respect thereof shall be those Persons who were obligors of such Indebtedness immediately prior to such Permitted Acquisition and (b) Restricted Subsidiaries that are Non-Loan Parties may not incur Indebtedness pursuant to this clause (h) Guarantee Obligations with respect to, or the assumption of, Indebtedness in an aggregate outstanding amount in excess of Franchisees, suppliers, distributors or licensees 3.0% of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)Total Assets;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its the Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(k) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseconnection with deposit accounts;
(n) Indebtedness in an aggregate principal amount not to exceed the greater of $250,000,000 and 8.0% of Total Assets at any time outstanding; provided that a maximum of the greater of $100,000,000 and 3.0% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(o) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of its Restricted Subsidiaries;
(s) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rt) Indebtedness in respect of the High Yield Notes and the Unsecured Term Loan and, in each case, any Permitted Refinancing thereof;
(u) Indebtedness in respect of (i) other unsecured any Permitted Other Debt issued or junior lien incurred in exchange for, or which modifies, extends, refinances, renews, replaces or refunds or the Net Cash Proceeds therefrom are applied to the prepayment of Term Loans in the manner set forth in Section 2.05(b)(iii) and (ii) any Permitted Refinancing of such Indebtedness; provided that, in the case of this subclause (ii), such Indebtedness otherwise complies with the definition of the Parent Borrower or any Restricted Permitted Other Debt;
(v) Indebtedness incurred by a Foreign Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (which, when aggregated with the principal amount of Permitted Refinancings in respect of all other Indebtedness originally incurred pursuant to this clause (Av) and then outstanding, does not exceed the greater of $300,000,000 and 10% of Total Assets;
(i) Indebtedness under a Subordinated Lien Facility in an aggregate principal amount not to exceed $200,000,000 at any time outstanding; provided that are consummated at the time of the incurrence of such Indebtedness and after giving Pro Forma Effect thereto, no Default exists or would result therefrom, and (ii) Permitted Refinancings in reliance on respect thereof; provided that the amount of Indebtedness incurred pursuant to this clause (w) shall not exceed at any time outstanding the sum of (1) $415,000,000 minus the aggregate amount of Incremental Term Loans and Incremental Revolving Credit Commitments incurred or effected pursuant to Section 7.03(r)(ii2.14(a)(1) belowand the aggregate amount of Indebtedness incurred pursuant to Section 7.03(aa) plus (B2) unlimited additional unsecured or junior lien Indebtedness, so long as either all voluntary prepayments of Term Loans and (to the extent coupled with a permanent reduction of the Revolving Credit Commitments) of Revolving Credit Loans prior to such time;
(x) Unsecured Indebtedness of the Total Leverage Ratio Borrower or any Restricted Subsidiary; provided that (calculated on a A) both immediately prior and after giving Pro Forma BasisEffect to such incurrence no Default or Event of Default shall exist or result therefrom and (B) if such Indebtedness is subordinated to the Obligations, it is done so on terms taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the end of Restatement Effective Date, as otherwise consistent with the most recent Test Period is not greater than 7.00:1.00 market for such Indebtedness or reasonably satisfactory to the Administrative Agent;
(y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end Indebtedness of the most recent Test Period is not less than 2.00:1.00Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition; provided further that, that such Indebtedness shall (A) in the case of any Indebtedness incurred under this clause (r)secured on a pari passu basis with the Facilities, (1) such Indebtedness shall not mature prior to the have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of Indebtedness secured on a junior basis to the Facilities, have a maturity date that is at least 91 days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) in the case of Indebtedness secured on a pari passu basis with the Term B Loans or Facilities, have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysand, in the case of Indebtedness secured on a junior basis to the Facilities, shall not be subject to scheduled amortization prior to maturity, (2C) if such Indebtedness shall not have mandatory prepaymentis secured on a junior basis by a Loan Party, redemption or offer to purchase events more onerous than those applicable be subject to the Term B LoansSecond Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be subject to the First Lien Intercreditor Agreement, (3D) in the other case of Indebtedness secured on a pari passu basis with the Facilities, be subject to the “most favored nation” provision contained in Section 2.14 and (E) have terms and conditions of such Indebtedness (excluding pricing other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption termsprovisions) reflect market that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions at of the time Loan Documents (when taken as a whole);
(z) to the extent constituting Indebtedness, obligations in respect of incurrence or issuance the ‘Subsequent Payment Amount’ (under and as defined in that certain Interest Purchase Agreement dated September 18, 2017 among the Borrower, ▇▇▇▇ Pharmica LLC, a limited liability company organized under the laws of such Indebtedness Indiana, ▇▇▇▇ Group Incorporated, a corporation incorporated under the laws of Indiana, and the other Persons party thereto, as in effect on the Amendment No. 3 Effective Date);
(4aa) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and Indebtedness secured on a pari passu basis with the Facilities, (y) 25.0% of Consolidated EBITDA of Indebtedness secured on a junior basis to the Parent Borrower for the most recently ended Test Period at any one time outstanding and Facilities or (iiz) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Partyunsecured Indebtedness, in an aggregate principal amount not to exceed the sum of (i) $415,000,000 minus the aggregate amount of Incremental Term Loans and Incremental Revolving Credit Commitments incurred or effected pursuant to Section 2.14(a)(1) and the aggregate amount of Indebtedness incurred pursuant to Section 7.03(w) plus (ii) all voluntary prepayments of Term Loans and (to the extent coupled with a permanent reduction of the Revolving Credit Commitments) of Revolving Credit Loans prior to such time; provided that such Indebtedness shall (A) $600,000,000 in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at any one the time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on incurred, and in the current assets case of Restricted Subsidiaries clause (y) above, have a maturity date that are not Loan Parties (and not on is at least 91 days after the Collateral), (2) Loan Parties shall not Guarantee Latest Maturity Date at the time such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loansis incurred, (B) as in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the date of the incurrence of such Indebtedness, the longest remaining Weighted Average Life to Maturity of such Indebtedness the Term Loans and, in the case of clause (y) above, shall not be shorter than that of the Term B Loanssubject to scheduled amortization prior to maturity, (C) no Restricted Subsidiary is a borrower or guarantor with respect to if such Indebtedness unless such Restricted Subsidiary is secured on a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed junior basis by a Loan Party, be subject to the ObligationsSecond Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (x) in the form of debt securities and (y) subject to the First Lien Intercreditor Agreement, (D) in the other case of clause (x) above, be subject to the “most favored nation” provision contained in Section 2.14 and (E) have terms and conditions of such Indebtedness (excluding pricing other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption termsprovisions) reflect market terms on the date of issuance, (E) if such Indebtedness is that in the form good faith determination of the Borrower are not materially less favorable (when taken as a term loan facility whole) to the Borrower than the terms and conditions of the Loan Parties and is secured Documents (when taken as a whole); provided that any such Indebtedness incurred by a Lien on the Collateral Restricted Subsidiary that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term not a Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerParty, together with all relevant financial information reasonably requested any Indebtedness incurred by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Aa Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(bb), does not exceed in the aggregate at any time outstanding, the greater of $100,000,000 and 3.0% of Total Assets, in each case determined at the time of incurrence;
(B)bb) Permitted Ratio Debt and Permitted Refinancings thereof; provided, (C)further, (D) and (E) (that any such Indebtedness incurred pursuant to this clause (t) being referred definition by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to as “Permitted Alternative Incremental Facilities Debt”) Section 7.03(aa), does not exceed in the aggregate at any time outstanding the greater of $100,000,000 and (ii) any Permitted Refinancing thereof3.0% of Total Assets, in each case determined at the time of incurrence;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(zcc) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.i
Appears in 1 contract
Sources: Credit Agreement (Catalent, Inc.)
Indebtedness. Create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness in respect of the Parent Borrower and Obligations of any of its Subsidiaries Group Member under the Loan Documentsor secured by this Agreement;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes Borrower or any Loan Party (and Guarantees thereof i) incurred under or secured by the Guarantors) Non-ABL Facility Documents in an aggregate principal amount not to exceed $2,250,000,000 820,000,000 or (ii) constituting other Permitted Non-ABL Loans incurred under clause (b) of the definition thereof and, in each case of clauses (i) and (ii), any Permitted Refinancing Indebtedness in respect thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02Subsidiary; provided that all such (x) any Indebtedness of any Loan Party owed shall be unsecured and shall be subordinated in right of payment to the Obligations on terms customary for intercompany subordinated Indebtedness, as reasonably determined by the Administrative Agent, (y) any such Indebtedness owing to any Person Loan Party shall be evidenced by a promissory note which shall have been pledged pursuant to the Guarantee and Collateral Agreement and (z) any such Indebtedness owing by any Subsidiary that is not a Loan Party to any Loan Party shall be incurred in compliance with Section 7.7;
(d) Guarantee Obligations incurred by any Group Member of obligations of any Group Member to the extent such obligations are not prohibited hereunder; provided that (i) to the extent any such obligations are subordinated to the Obligations, any such related Guarantee Obligations incurred by a Loan Party shall be subordinated to the guarantee of such Loan Party of the Obligations on terms no less favorable to the Lenders than the subordination provisions of the obligations to which such Guarantee Obligation relates and (ii) any Guarantee Obligations incurred by any Loan Party of obligations of a Restricted Subsidiary that is not a Loan Party shall be subject permitted to the subordination terms set forth extent incurred in compliance with Section 3.01 of 7.7;
(e) Indebtedness outstanding on the GuarantyClosing Date and listed on Schedule 7.2(e) and any Permitted Refinancing Indebtedness in respect thereof;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized LeasesCapital Lease Obligations) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270secured by Liens permitted by Section 7.3(g) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xi) $100,000,000 75,000,000 and (yii) 6.05% of Consolidated EBITDA Net Tangible Assets (as of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (iidate incurred); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees or directors of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(kh) Indebtedness incurred by in the Parent Borrower ordinary course of business or that is consistent with past practice and owed in respect of any netting services, overdrafts and related liabilities arising from treasury, depository, credit or debit card, purchase card or other cash management services or in connection with any automated clearing-house transfers of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Dispositionfunds, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsthat does not constitute Indebtedness for borrowed money;
(li) Indebtedness consisting of obligations of the Parent Borrower or arising under any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred Swap Agreement permitted by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderSection 7.11;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(nj) Indebtedness consisting (other than Indebtedness for borrowed money) that may be deemed to exist pursuant to any guarantees, warranty or contractual service obligations, performance, surety, statutory, appeal, bid, prepayment guarantee, payment (other than payment of (aIndebtedness) the financing or completion of insurance premiums performance guarantees or (b) take or pay similar obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(ok) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankersworkers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, payment obligations in connection with health, disability or other employee benefits or propertytypes of social security benefits, casualty or liability insurance or self-insurance unemployment or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performanceinsurance obligations, bid, appeal reclamation and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretostatutory obligations, in each case in the ordinary course of business or consistent with past practicebusiness;
(ql) Indebtedness supported arising from the honoring by a Letter bank or other financial institution of Credit in a principal amount not to exceed the face amount of check, draft or similar instrument drawn against insufficient funds, so long as such Letter of CreditIndebtedness is covered or extinguished within five Business Days;
(rm) Indebtedness consisting of (i) the financing of insurance premiums or self-insurance obligations or (ii) take-or-pay obligations contained in supply or similar agreements in each case in the ordinary course of business;
(n) Indebtedness in the form of purchase price adjustments (including in respect of working capital), earnouts, deferred compensation, indemnification or other unsecured arrangements representing acquisition consideration or junior lien deferred payments of a similar nature incurred in connection with any Permitted Acquisitions or other Investments permitted under Section 7.7 or Dispositions permitted under Section 7.5 (other than Dispositions permitted under Section 7.5(m);
(i) Indebtedness of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Parent Borrower or a Restricted Subsidiary in a transaction permitted hereunder) after the Closing Date, or Indebtedness of any Person that is assumed by the Borrower or any Restricted Subsidiary in connection with an aggregate amount not to exceed (A) $1,000,000,000 acquisition of assets by the Borrower or such Restricted Subsidiary in a Permitted Acquisition; provided that such Indebtedness exists at the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of any incurrence pursuant to this clause or in connection with such Person becoming a Restricted Subsidiary (Aor such merger or consolidation) or such assets being acquired and (when aggregated with the amount of ii) Permitted Refinancings Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant such Indebtedness; provided that after giving effect to this clause the applicable acquisition (Aor merger or consolidation) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien such assumption of Indebtedness, so long as either (x) the Total Consolidated Leverage Ratio (for the Applicable Reference Period, calculated on a Pro Forma Basis) Basis as of the end date of the most recent Test Period such acquisition (or merger or consolidation) or assumption, is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end in excess of the most recent Test Period is not less than 2.00:1.005.00 to 1.00; provided further that, in that the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness of Subsidiaries that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-are not Loan Parties shall not exceed outstanding under this Section 7.2(o), together with the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional of Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties outstanding under Sections 7.2(u) and 7.2(w), shall not exceed the Non-Guarantor Debt Limit (and not as of the date of incurrence of Indebtedness pursuant to this Section 7.2(o));
(p) Indebtedness arising under the membership agreement entered into by the Borrower with any Farm Credit Lender in connection with the Borrower’s obligation to acquire equity in any such Farm Credit Lender pursuant to Section 6.11 of the Existing Non-ABL Credit Agreement as in effect on the Collateral), Fifth Amendment Effective Date;
(2q) Loan Parties shall [Reserved]
(r) Indebtedness of the Borrower in respect of the 2028 Notes in an aggregate principal amount at any time outstanding not Guarantee such to exceed $275,000,000 and any Permitted Refinancing Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriain respect thereof;
(i) Subordinated Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (in i) $150,000,000 and (ii) 15.00% of Consolidated Net Tangible Assets (as of the form date incurred);
(t) [Reserved].
(i) Permitted Unsecured Indebtedness so long as, at the time of senior securedincurrence of such Permitted Unsecured Indebtedness, senior unsecuredthe Consolidated Leverage Ratio for the Applicable Reference Period, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) calculated on a Pro Forma Basis as of the date of incurrence thereof (but excluding from Unrestricted Cash in making such pro forma calculation the Net Cash Proceeds of such Indebtedness), is not in excess of 5.00 to 1.00; provided that (x) immediately prior to and immediately after giving effect to the incurrence of such Indebtednessany Permitted Unsecured Indebtedness under this Section 7.2(u), no Default or Event of Default shall have occurred and be continuing and (y) the Weighted Average Life aggregate principal amount of Permitted Unsecured Indebtedness of Restricted Subsidiaries that are not Loan Parties outstanding under this Section 7.2(u), together with the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties incurred pursuant to Maturity of such Indebtedness Sections 7.2(o) and 7.2(w), shall not be shorter than that exceed the Non-Guarantor Debt Limit (as of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such incurrence of Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and Section 7.2(u))and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(uv) Indebtedness of the Borrower or any of its Restricted Subsidiaries arising out of any Permitted Supply Chain Financing;
(w) additional Indebtedness of the Borrower or any of its Restricted Subsidiaries in an aggregate principal amount (for the Borrower and all Restricted Subsidiaries) not to exceed at any time outstanding the greater of (i) $100,000,000 and (ii) 7.5% of Consolidated Net Tangible Assets (as of the date incurred); provided that the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties outstanding under this Section 7.2(w), together with the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties outstanding under Section 7.2(o) and 7.2(u), shall not exceed the Non-Guarantor Debt Limit (as of the date of incurrence of Indebtedness pursuant to this Section 7.2(w));
(x) Attributable Indebtedness in an aggregate principal amount not to exceed the greater of (xi) $500,000,000 75,000,000 and (yii) 30.05% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
Net Tangible Assets (v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtednessincurred) at any time outstanding, the Weighted Average Life to Maturity of such which Attributable Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate arises out of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) sale and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financingleaseback transaction permitted under Section 7.10;
(y) Indebtedness of any Loan Party in respect an aggregate principal amount not to exceed the Net Cash Proceeds (Not Otherwise Applied) received after the Closing Date and on or prior to such date from any issuance of Permitted Debt Exchange Notes incurred pursuant Qualified Capital Stock by the Borrower (other than any such issuance to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; andGroup Member);
(z) all premiums Guarantee Obligations incurred by any Group Member of obligations of any Joint Venture or Unrestricted Subsidiary to the extent permitted under Section 7.7(u); and (if any), interest aa) (including posti) Indebtedness secured by ▇▇▇▇▇ permitted by Section 7.3(h)(iii) in an aggregate principal amount not to exceed $30,000,000 and (ii) Subordinated Indebtedness permitted to be incurred under the Existing Non-petition interest), fees, expenses, charges and additional or contingent interest ABL Credit Agreement as in effect on obligations described in clauses (a) through (y) abovethe Fifth Amendment Effective Date. For purposes of determining compliance with this Section 7.037.2, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zaa) above, the Parent Borrower shallmay, in its sole discretion, divide or classify and reclassify or later divide, classify or reclassify all or a portion of such item of Indebtedness (or any portion thereof) in a manner that complies with this Section 7.2 and will only be required to include the amount and type of such Indebtedness (or any portion thereof) in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents and Permitted Non-ABL Loans and, in each case, any Permitted Refinancing Indebtedness in respect thereof, will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (aSection 7.2(a) and Section 7.2(b), respectively. For the avoidance of this Section 7.03 doubt, a permitted refinancing in respect of Indebtedness incurred pursuant to a Dollar-denominated or Consolidated Net Tangible Assets-governed basket shall not increase capacity to incur Indebtedness under such Dollar-denominated or Consolidated Net Tangible Assets-governed basket, and the Senior Secured Notes will such Dollar-denominated or Consolidated Net Tangible Assets-governed basket shall be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed continue to be an incurrence utilized by the amount of the original Indebtedness for purposes of this Section 7.03incurred unless and until the Indebtedness incurred to effect such permitted refinancing is no longer outstanding.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) in the case of the US Borrower, Indebtedness evidenced by the Senior Subordinated Notes and any Permitted Refinancing thereof (which may be incurred by any Borrower, notwithstanding anything to the contrary in the definition of the term Permitted Refinancing); and
(b) in the case of any Borrower or any Restricted Subsidiary:
(i) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Parties under the Loan Documents;
(bii) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (date hereof and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) Guarantees by any Permitted Refinancing of Borrower or any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent any Borrower or any such Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the applicable Guaranty to the extent required by Section 6.12 and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination provisions of such Indebtedness;
(eiv) Indebtedness of the Parent any Borrower or any Restricted Subsidiary owing to the Parent any Borrower or any other Restricted Subsidiary to the extent constituting in respect of an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person Subsidiary that is not a Loan Party shall must be subject expressly subordinated to the subordination terms set forth in Section 3.01 Obligations of such Loan Party, it being understood that such Loan Party may make payments thereon prior to the Guarantyoccurrence (but not during the continuance) of an Event of Default;
(f) (iv) Attributable Indebtedness and other Indebtedness purchase money obligations (including Capitalized Leasesobligations in respect of mortgage, industrial revenue bond, industrial development bond, and similar financings) financing to finance the acquisitionpurchase, construction, repair, replacement repair or improvement of fixed or capital assets (within the limitations set forth in Section 7.01(i) and any Permitted Refinancing thereof; provided that the aggregate amount of all such Indebtedness is incurred concurrently with or within two hundred seventy at any one time outstanding shall not exceed $25,000,000;
(270vi) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks Foreign Subsidiaries that are not Loan Parties in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) for all such Persons taken together not exceeding $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period20,000,000;
(gvii) Indebtedness in respect of Swap Contracts required by Section 6.15 or in respect of other Swap Contracts incurred in the ordinary course of business and not for speculative purposes;
(iviii) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure Indebtedness (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (iifor borrowed money) entered into in order subject to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceLiens permitted under Section 7.01;
(hix) Guarantee Obligations Indebtedness (A) assumed in connection with respect toany Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) owed to the assumption ofseller of any property acquired in a Permitted Acquisition on an unsecured subordinated basis, Indebtedness of Franchisees, suppliers, distributors or licensees of which subordination shall be on terms reasonably satisfactory to the Parent Borrower and its Restricted SubsidiariesAdministrative Agent, in each case case, so long as both immediately prior and after giving effect thereto (x) no Event of Default shall exist or result therefrom, and (y) the Borrower Parties shall be in Pro Forma Compliance with the covenants set forth in Section 7.11, after giving effect to such Permitted Acquisition and the extent permitted by Section 7.02(y)assumption, incurrence or issuance of such Indebtedness, and any Permitted Refinancing thereof;
(ix) Indebtedness representing deferred compensation to employees of the Parent any Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries Subsidiary incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(kxi) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted AcquisitionAcquisition or Disposition under agreements providing for indemnification, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect adjustment of the purchase price (including earn-outs) or other similar adjustments;
(lxii) Indebtedness consisting of obligations of the Parent any Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions and Permitted Acquisitions or any other Investment expressly permitted hereunderAcquisitions;
(mxiii) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseconnection with cash management and deposit accounts;
(nxiv) Indebtedness in an aggregate principal amount not to exceed $100,000,000 at any time outstanding;
(xv) Indebtedness consisting of (aA) the financing of insurance premiums or (bB) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(oxvi) Indebtedness incurred by the Parent any Borrower or any of its Restricted Subsidiaries in Subsidiary constituting reimbursement obligations with respect of to letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments credit issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;
(pxvii) obligations in respect of performancesurety, bidstay, customs and appeal and surety bonds, performance bonds and performance and completion guarantees and similar obligations provided by the Parent any Borrower or any of its Restricted Subsidiaries Subsidiary or obligations in respect of letters of credit, bank guarantees or similar instruments credit related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(rxviii) (iA) other unsecured or junior lien Permitted Subordinated Indebtedness of the Parent Borrower or any Restricted Subsidiary (1) in an aggregate amount not to exceed $200,000,000 to the extent the Net Cash Proceeds of such Indebtedness are utilized within 120 days of the incurrence thereof to finance a Permitted Acquisition (A) $1,000,000,000 at or if not so utilized within such time period, solely to the time extent the Net Cash Proceeds of any incurrence such Indebtedness are applied to prepay Term Loans pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r2.05(b)(iv), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days), (2) such Indebtedness shall in an aggregate amount not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, exceed $50,000,000 and (3) in an aggregate amount in excess of $50,000,000 solely to the other terms and conditions extent that the full amount of Net Cash Proceeds of any such Indebtedness (excluding pricing and optional prepayment or redemption termsin excess of $50,000,000 is applied to prepay Term Loans pursuant to Section 2.05(b)(iv) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (iiB) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(yxix) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange any bankers’ acceptance, letter of credit, warehouse receipt or similar facilities entered into in accordance with Section 2.17 and any Permitted Refinancing thereofthe ordinary course of business; and
(zxx) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (ai) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03xix).
Appears in 1 contract
Indebtedness. CreateNone of the Borrower or any Restricted Subsidiary will create, incur, assume or suffer permit to exist any IndebtednessIndebtedness or Disqualified Equity Interests, except:
(ai) Indebtedness of the Parent Borrower and any of its Subsidiaries created under the Loan Documents;
(bii) Indebtedness existing on the Effective Date and set forth on Schedule 6.01 and Refinancing Indebtedness in respect thereof;
(iii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not Borrower to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower Subsidiary or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier have been transferred to any Person other than the Maturity Date applicable to the Term B LoansBorrower or any Restricted Subsidiary, (B) as any such Indebtedness owing by the Borrower to any Restricted Subsidiary or by any Loan Party to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated in right of payment to the Loan Document Obligations in accordance with the provisions of the date Global Intercompany Note and (C) any such Indebtedness owing by any Restricted Subsidiary that is not a Loan Party to any Loan Party shall be incurred in compliance with Section 6.04;
(iv) Guarantees by the Borrower of Indebtedness of any Restricted Subsidiary and by any Restricted Subsidiary of Indebtedness of the incurrence of such IndebtednessBorrower or any other Restricted Subsidiary; provided that (A) the Indebtedness so Guaranteed is permitted by this Section (other than clause (ii) or (vi)), the Weighted Average Life to Maturity (B) Guarantees by any Loan Party of such Indebtedness of any Restricted Subsidiary that is not a Subsidiary Loan Party shall not be shorter than that of the Term B Loansincurred in compliance with Section 6.04, (C) no Guarantees permitted under this clause (iv) shall be subordinated to the Obligations of the applicable Restricted Subsidiary to the same extent and on the same terms as the Indebtedness so Guaranteed is a borrower subordinated to the Obligations;
(v) Indebtedness of the Borrower or guarantor with respect any Restricted Subsidiary (A) incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and Synthetic Lease Obligations, provided that such Indebtedness unless is incurred prior to or within 270 days after such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously acquisition or substantially concurrently guaranteed the Obligations, (D) completion of such construction or improvement and the other terms and conditions principal amount of such Indebtedness does not exceed the cost of acquiring, constructing or improving such fixed or capital assets or (excluding pricing and optional prepayment B) assumed in connection with the acquisition of any fixed or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is capital assets or secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered assets prior to the Administrative Agent a certificate acquisition thereof, and Refinancing Indebtedness in respect of a Responsible Officer any of the Parent Borrower, together with all relevant financial information reasonably requested by foregoing; provided that the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such aggregate outstanding principal amount of Indebtedness incurred pursuant to in reliance on this clause (tvi) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) shall not at any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to time of incurrence exceed the greater of (x) $500,000,000 50,000,000 and (y) 30.03.00% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Net Tangible Assets as of the last day of the fiscal quarter, if any, of the Borrower most recently ended for which financial statements shall have been delivered pursuant to Section 5.01(a) or 5.01(b);
(vi) Permitted Acquired Debt; provided that after giving effect to the acquisition of the obligor in respect thereof or the assumption by any Restricted Subsidiary of such Permitted Acquired Debt, (A) in the case of any Permitted Acquired Debt in respect of which the only Restricted Subsidiaries that are obligors are CFCs, the Borrower shall be in compliance on a Pro Forma Basis with the Leverage Ratio under Section 6.12 for the most recent Test Period is either prior to such time for which financial statements shall have been delivered pursuant to Section 5.01(a) or 5.01(b) (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately or, prior to the consummation delivery of any such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Partiesfinancial statements, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended recent Test Period at any one time outstanding;
(i) Indebtedness (contained in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower financial statements referred to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii3.04); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) the aggregate outstanding principal amount of Permitted Acquired Debt of all Permitted Acquired Debt Non-Guarantors (including any Subsidiary that will become a Permitted Acquired Debt Non-Guarantor in connection with such acquisition) shall not exceed $100,000,000, and (C) the combined total assets of all Permitted Acquired Debt Non-Guarantors shall be less than 5% of the consolidated total assets of the Borrower (excluding assets of, and investments in, CFCs) and the combined revenues of all Permitted Acquired Debt Non-Guarantors shall account for less than 5% of the consolidated revenues of the Borrower (excluding consolidated revenues attributable to CFCs), in each case as of the date end of or for the most recent period of four consecutive fiscal quarters of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor Borrower for which financial statements shall have previously been delivered pursuant to Section 5.01(a) or substantially concurrently guaranteed 5.01(b) (or, prior to the Obligationsdelivery of any such financial statements, as of and for the most recent such period contained in the financial statements referred to in Section 3.04) (D) the terms but with such consolidated total assets and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall revenues calculated by treating Unrestricted Subsidiaries as if they were not participate in mandatory prepayments on a greater than pro rata basis consolidated with the Term Loans Borrower and (E) the Parent Borrower has delivered to the Administrative Agent a certificate otherwise eliminating all accounts of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (AUnrestricted Subsidiaries), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantorsdate hereofFirst Amendment Effective Date set forth on Schedule 9.3(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the date hereofFirst Amendment Effective Date; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d9.3(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.039.3); provided thatthat (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty, and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness, and (ii) any Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by such Loan Party in such Restricted Subsidiary under Section 9.2(c);
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.029.2; provided that (i) all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth Intercompany Subordination Agreement and (ii) in Section 3.01 the event of any such Indebtedness in respect of the Guarantysale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)improvement and any Permitted Refinancing thereof in an aggregate principal amount pursuant to this sub-clause (i) not to exceed the greater of $55,000,00070,000,000 and 2.504.75% of Total Assets, in each case determined at the date of incurrence, (ii) Attributable Indebtedness arising out of sale-leaseback transactions (other than sale-leaseback transactions with respect to any Designated Assets) with respect to properties acquired after the First Amendment Effective Date and any Permitted Sale Leasebacks Refinancing thereof in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to this sub-clause (ii)) under this Section 7.03(f) does at any time not to exceed the greater of (x) $350,000,000 55,000,00070,000,000 and (y) 20.02.504.75% of Consolidated EBITDA Total Assets, in each case determined at the date of the Parent Borrower for the most recently ended Test Periodincurrence, and (iii) Attributable Indebtedness arising out of sale-leaseback transactions with respect to any Designated Assets, and any Permitted Refinancing thereof;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which against Holdings, the Parent Borrower Borrower’s or any Subsidiary has actual or anticipated Restricted Subsidiary’s exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment commodities pricing risks incurred in the ordinary course of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancenot for speculative purposes and Guarantees thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(ig) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jh) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding9.6;
(ki) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lj) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(mk) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(nl) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $75,000,00095,000,000 and 3.506.50% of Total Assets (determined at the time of incurrence); provided that a maximum of the greater of $25,000,00035,000,000 and 1.252.50% of Total Assets (determined at the time of incurrence) in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(m) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(on) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(po) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qp) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (Ai) $600,000,000 725,000,000 at any one time outstanding under the Term Facility900,000,000 plus (Bii) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets amount of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than clauses (y) and (z) of the Maturity Date applicable to Maximum Incremental Amount (as defined in the Term B LoansFacility Credit Agreements as in effect on the First Amendment Effective Date or, subject to prior consent of the Administrative Agent, as in effect after the First Amendment Effective Date), (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B LoansPermitted Pari Passu Secured Debt, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the ObligationsSecured Obligations under Secured Hedge Agreements, and not incurred in violation of Section 9.3(f) , (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) Obligations under Secured Cash Management Agreements and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Credit Agreement (JOANN Inc.)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness outstanding on the Closing Date and listed in Section 7.03(b) of the Borrowers in respect of Confidential Disclosure Letter and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Closing Date and any Permitted Refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such Guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated to the subordination terms set forth in Section 3.01 of the GuarantyObligations pursuant to an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by the Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, constructionlease or improvement of the applicable asset and any Permitted Refinancing thereof in an aggregate amount not to exceed the greater of $35,000,000 and 2.00% of Total Assets, repair, replacement or improvement), in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation such Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against the Borrower’s or mitigate any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Restricted Subsidiary has actual or anticipated exposure assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided further that, after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (other x) $25,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long as the Total Leverage Ratio is no greater than those 5.25:1.00 and, if such Indebtedness is secured, the Secured Leverage Ratio is no greater than 4.00:1.00, in respect each case determined on a Pro Forma Basis; provided that in the case of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiaryclause (y), (ii) entered into any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(s), does not exceed in order to effectively capthe aggregate at any time outstanding the greater of $35,000,000 and 2.00% of Total Assets, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment in each case determined at the time of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceincurrence;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $90,000,000 and 4.00% of Total Assets; provided that the aggregate principal amount of Indebtedness outstanding in reliance on this clause (m) in respect of which the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan Party shall not exceed in the aggregate at any time outstanding the greater of $35,000,000 and 2.00% of Total Assets, in each case incurred in determined at the ordinary coursetime of incurrence;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause the Senior Notes and the Existing Notes (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further thatincluding, in the case of each case, any Indebtedness incurred under this clause (r)guarantees thereof) and, (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 daysin each case, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(r) ABL Facility Indebtedness of the Loan Parties (a) under clause (i) of the definition of ABL Facility Indebtedness in an aggregate principal amount at any time outstanding not to exceed the greater of (i) the Maximum ABL Facility Amount and (ii) the Borrowing Base and (b) under clauses (ii) and (iii) of the definition of ABL Facility Indebtedness;
(s) Permitted Ratio Debt and any Permitted Refinancing thereof;
(t) Credit Agreement Refinancing Indebtedness;
(u) Indebtedness incurred by a Non-Loan PartyForeign Subsidiary which, and guarantees thereof by Non-Loan Party, in an aggregate when aggregated with the principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the all other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”u) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount then outstanding, does not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding15,000,000;
(v) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings and Limited Originator Recourse) to finance the Borrower or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as any of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofSubsidiaries; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yv) above. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 1 contract
Sources: Term Loan Credit Agreement (Prestige Brands Holdings, Inc.)
Indebtedness. CreateNeither the Company nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Existing RCF Credit Agreement in an aggregate principal amount not to exceed $2,250,000,000 and the principal amount permitted to be incurred pursuant to the terms of the Existing RCF Credit Agreement as in effect on the Closing Date and, in the case of this clause (ii), any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and, with respect any such Indebtedness in an aggregate principal amount in excess of the Parent Borrower $15,000,000, listed on Schedule 7.03(b) and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, Permitted Refinancing thereof and (ii) Surviving Indebtedness listed owed to the Company or any Restricted Subsidiary outstanding on Schedule 7.03(cthe Closing Date and any refinancing thereof with Indebtedness owed to the Company or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (iiiy) any Permitted Refinancing all such Indebtedness of any of Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the foregoingObligations pursuant to an Intercompany Note;
(dc) Guarantee Obligations of Guarantees by the Parent Borrower Company and its any Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower Company or any Restricted Subsidiary of the Company otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee of any Senior Unsecured Notes or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower Company or any Restricted Subsidiary owing to the Parent Borrower Company or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of a fixed or capital asset incurred by the Company or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of (a) $335,000,000 and (b) 6.0% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Company’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Company or any Restricted Subsidiary assumed in connection with any Permitted Acquisition so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) the greater of (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), $75,000,000 and (ii) entered into 1.5% of Total Assets at any time outstanding plus (y) any additional amount of such Indebtedness so long (i) if such Indebtedness is secured on a junior basis to the Facilities, the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis is no greater than the Applicable Consolidated Total Net Leverage Ratio Level (or if such Indebtedness is assumed in order connection with a Permitted Acquisition or other similar Investment not prohibited by this Agreement, no greater than the greater of (1) the Applicable Consolidated Total Net Leverage Ratio Level and (2) the Consolidated Total Net Leverage Ratio immediately prior to effectively capthe consummation of such Permitted Acquisition or Investment); (ii) if such Indebtedness is secured on a pari passu basis with the Facilities, collar the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than the Applicable Consolidated First Lien Net Leverage Ratio Level (or exchange interest rates if such Indebtedness is assumed in connection with a Permitted Acquisition or other similar Investment not prohibited by this Agreement, no greater than the greater of (from fixed 1) the Applicable Consolidated First Lien Net Leverage Ratio Level and (2) the Consolidated First Lien Net Leverage Ratio immediately prior to floating rates, from one floating rate to another floating rate the consummation of such Permitted Acquisition or otherwise) with respect to any interest-bearing liability Investment); or investment of the Parent Borrower or any Subsidiary and (iii) entered into if such Indebtedness is unsecured, the Company and its Restricted Subsidiaries are in compliance with either (I) a Consolidated Interest Coverage Ratio no less than either (A) 2.00 to hedge commodities1.00 or (B) in the case of any such Indebtedness being assumed in connection with a Permitted Acquisition or other similar Investment not prohibited by this Agreement, currenciesthe Consolidated Interest Coverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition or investment or (II) a Consolidated Total Net Leverage Ratio no greater than either (A) 4.00 to 1.00 or (B) in the case of any such Indebtedness being assumed in connection with a Permitted Acquisition or other similar investment not prohibited by this Agreement, general economic conditionsthe Consolidated Total Net Leverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition or Investment, raw materials pricesdetermined, revenue streams in each case, on a Pro Forma Basis as of the date of incurrence of such Indebtedness; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or business performance7.03(w), does not exceed in the aggregate at any time outstanding the greater of (A) $240,000,000 and (B) 4.25% of Total Assets;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation or similar arrangements (i) to employees any future, present or former employees, directors, officers, managers, members, partners, independent contractors or consultants of the Parent Borrower Company (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of businessbusiness or consistent with past practice or (ii) incurred in connection with any Investment, acquisition (by merger, consolidation, amalgamation or otherwise) or other transaction;
(ji) Indebtedness consisting of promissory notes issued by the Company or any of its Restricted Subsidiaries to future, current or former officers, directors, partners, managers, consultants members, independent contractors, consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Company or any direct or indirect parent thereof) of the Company permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower Company or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purposes of financing such acquisition; provided, that such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (j));
(lk) Indebtedness consisting of obligations of the Parent Borrower Company or any of its Restricted Subsidiaries under deferred compensation compensation, deferred purchase price, earn-outs or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseCompany or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of (a) $420,000,000 and (b) 7.25% of Total Assets at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests or sales of Equity Interests to the Company or any of its Subsidiaries) of the Company or any direct or indirect parent of the Company after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Company that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv));
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of businessbusiness or consistent with past practice;
(o) Indebtedness incurred by the Parent Borrower Company or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created created, or relating to obligations or liabilities incurred, in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of self-insurance and obligations in respect of stays, customs, performance, bid, appeal indemnity, appeal, judgment and surety other similar bonds or instruments and performance performance, bankers’ acceptance and completion guarantees and similar obligations provided by the Parent Borrower Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) so long as no Event of Default has occurred and is continuing or would result therefrom (or if the proceeds of such Indebtedness are being used to finance a Permitted Acquisition or other similar Investment not prohibited by this Agreement, no Event of Default under Sections 8.01(a) or (f) has occurred and is continuing), Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A) and the amount of Incremental Revolving Credit Commitments (as defined in the Existing RCF Credit Agreement) incurred on or after the Closing Date pursuant to Section 2.14(d)(v)(A) of the Existing RCF Credit Agreement, not to exceed the greater or (x) $625,000,000 and (y) 100% of LTM Consolidated EBITDA; provided that such Indebtedness shall (A) in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party subject to the First Lien Intercreditor Agreement and/or the Junior Lien Intercreditor Agreement, as applicable, and (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Company are not materially less favorable (when taken as a whole) to the Company than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Company as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Company within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding the greater of (1) $240,000,000 and (2) 4.25% of Total Assets;
(r) Indebtedness supported by a Letter of Credit (as defined in the Existing RCF Credit Agreement), in a principal amount not to exceed the face amount of such Letter of CreditCredit (as defined in the Existing RCF Credit Agreement);
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional Indebtedness in an aggregate principal amount attributable to (but not incurred to exceed finance) the greater exercise of appraisal rights and the settlement of any claims or actions (xwhether actual, contingent or potential) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingwith respect thereto;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x1) $400,000,000 50,000,000 and (y2) 25.010.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingForeign Subsidiary Total Assets;
(iw) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.unsecured
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness obligations (contingent or otherwise) existing or arising under any Swap Contract; provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the Parent Borrower purpose of directly mitigating risks associated with fluctuations in interest rates, foreign exchange rates or commodity prices and (ii) such Swap Contract does not contain any of provision exonerating the non-defaulting party from its Subsidiaries under obligation to make payments on outstanding transactions to the Loan Documentsdefaulting party;
(b) Indebtedness evidenced by the Existing Senior Notes and any Permitted Refinancing thereof; provided that no Subsidiary of the Borrowers in respect Borrower that is not a Guarantor of the Obligations shall be a guarantor of the Existing Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and or any Permitted Refinancing thereof;
(c) Indebtedness of the Borrower owed to any Subsidiary and of any Subsidiary owed to the Borrower or any other Subsidiary, which Indebtedness shall (i) in the case of Indebtedness of owed to a Loan Party, constitute “Collateral” under the Parent Borrower Security Agreement and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing in the case of any of the foregoingIndebtedness owed by a Loan Party to a Subsidiary that is not a Loan Party, be subject to an Intercompany Note Subordination Agreement;
(d) Guarantee Obligations of Indebtedness outstanding on the Parent Borrower Closing Date and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or listed on Schedule 7.02 and any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessPermitted Refinancing thereof;
(e) Guarantees by the Borrower of Indebtedness of any Subsidiary, by any other Loan Party of Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary, and by any Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party of Indebtedness of any other Subsidiary that is not a Loan Party; provided that (i) the Indebtedness so Guaranteed is permitted by this Section 7.02 and (ii) the Guarantees permitted under this clause (d) shall be subject subordinated to the subordination terms set forth in Section 3.01 Obligations of the Guarantyapplicable Subsidiary to the same extent and on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations;
(f) (i) Attributable Indebtedness and other Indebtedness (including in respect of Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of Synthetic Lease Obligations and purchase money obligations for fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvementlimitations set forth in Section 7.01(i), in each case incurred to finance the acquisition of new assets or the construction or improvement of assets; provided, however, that after giving effect to the incurrence of any Indebtedness in reliance on this clause (iif) Attributable Indebtedness arising out of Permitted Sale Leasebacks on a Pro Forma Basis, the Borrower shall be in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower compliance with Section 7.11 for the most recently ended Test Measurement Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred for which financial statements have been delivered pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period6.01;
(g) Indebtedness in respect of Swap Contracts any Person that becomes a Subsidiary (i) entered or that is merged or consolidated with or into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary) after the Closing Date in accordance with the terms of Section 7.03, which Indebtedness is existing at the time such Person becomes a Subsidiary has actual (or anticipated exposure that is merged or consolidated with or into the Borrower or any Subsidiary) (other than those Indebtedness incurred solely in respect contemplation of shares of capital stock such Person’s becoming a Subsidiary, or other equity ownership interests of being merged or consolidated with or into the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect toIndebtedness to the Receivables Financiers arising under or incidental to the Permitted Receivables Facilities not to exceed $400,000,000 at any time outstanding; and to the extent that any purported sale, transfer or contribution of Permitted Securitization Transferred Assets from the assumption ofBorrower or any Subsidiary to a Special Purpose Finance Subsidiary shall ever be deemed not to constitute a true sale, any Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent applicable Special Purpose Finance Subsidiary to the Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)Subsidiaries arising therefrom;
(i) Indebtedness representing deferred compensation that may be deemed to employees of exist pursuant to any performance bond, surety, statutory appeal or similar obligation entered into or incurred by the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) other Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption aggregate unpaid principal amount of Equity Interests of Holdings (or which shall not at any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to time exceed $20,000,000 at any one time outstanding250,000,000;
(k) Indebtedness consisting of the financing of insurance premiums;
(l) Indebtedness (i) incurred by the Parent Borrower in connection with an Investment or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly Disposition permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
adjustments and (lii) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person the Borrower or any Subsidiary in connection with the Transaction and Permitted Acquisitions or any other an Investment expressly permitted hereunder;
(m) Cash Management Obligations and Indebtedness created under this Agreement or any other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseLoan Document;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00Loan Parties; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as no Event of the most recent Test Period is either (x) not greater than 7.00:1.00 Default shall exist or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtednessresult therefrom, (ii) if such Indebtedness is secured by a Lien on subordinated Indebtedness, the Collateral that is pari passu with the Lien securing terms of such Indebtedness provide for customary subordination of such Indebtedness to the Obligations, (Aiii) no Subsidiary (other than a Guarantor) is an obligor under such Indebtedness (including pursuant to any Guarantee thereof) unless such Subsidiary, substantially concurrently with becoming an obligor under such Indebtedness, becomes a Guarantor, (iv) if such Indebtedness is secured, it shall not be secured by any assets that do not constitute the Collateral and (v) after giving Pro Forma Effect effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio incurrence of any Indebtedness in reliance on this clause (calculated n) on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower Interest Coverage Ratio for the most recently ended Test Measurement Period at any one time outstandingfor which financial statements have been delivered pursuant to Section 6.01 shall not be less than 2.00:1.00;
(io) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms constituting Incremental Equivalent Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(xp) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Refinancing Equivalent Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof;
(i) Indebtedness under Secured Foreign Line of Credit Agreements and Secured Letter of Credit Agreements and (ii) Indebtedness under working capital and other similar lines of credit of Foreign Subsidiaries in an aggregate principal amount at any time outstanding not to exceed $100,000,000; and
(zr) all premiums (if any), interest (including post-petition interest), fees, expenses, charges Indebtedness of the Borrower owed to any Subsidiary and additional of any Subsidiary owed to the Borrower or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03any other Subsidiary, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been each case incurred in reliance only on order to consummate the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03Reorganization.
Appears in 1 contract
Indebtedness. CreateThe Borrower shall not, nor shall the Borrower permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in respect of Sixth Amendment Effective Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Sixth Amendment Effective Date and any Permitted Refinancing thereof; provided that (x) any intercompany Indebtedness shall be evidenced by an Intercompany Note and (y) any intercompany Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to the subordination provisions contained in an Intercompany Note;
(c) Guarantees by any member of the Restricted Group in respect of Indebtedness of the Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder; provided that (i) no Guarantee by Holdings or any Restricted Subsidiary of any Indebtedness of a Loan Party (including the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing 2025 Unsecured Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) the 2027 Unsecured Notes, any Junior Financing, any Incremental Equivalent Debt, any Permitted First Priority Refinancing Debt, any Permitted Second Priority Refinancing Debt, any Permitted Unsecured Refinancing Debt or any Permitted Refinancing of any of the foregoing;
(d) shall be permitted unless such guaranteeing party shall have also provided a Guarantee Obligations of the Parent Borrower Obligations on the terms set forth herein and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, ii) if the Indebtedness being guaranteed Guaranteed is subordinated to the ObligationsJunior Financing, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination provisions of such IndebtednessJunior Financing;
(ed) Indebtedness (other than Indebtedness permitted under Section 7.03(b)) of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject unsecured and subordinated to the Obligations pursuant to the subordination terms set forth provisions contained in Section 3.01 of the Guarantyan Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness of the Borrower or any Restricted Subsidiary (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with prior to or within two hundred seventy (270) no later than 270 days after the applicable acquisition, construction, repair, replacement lease or improvement), (ii) Attributable Indebtedness arising out improvement of Permitted Sale Leasebacks the applicable asset in an aggregate principal amount not to exceed (together with any Permitted Refinancings thereof) at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to under this clause (ii)e) under this Section 7.03(f) does not to exceed the greater of (x) $350,000,000 150,000,000 and (y) 20.050.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodPeriod (calculated on a Pro Forma Basis) and (ii) Attributable Indebtedness of the Borrower or any Restricted Subsidiary arising out of sale-leaseback transactions permitted by Section 7.05(m) and, in each case under this clause (e), any Permitted Refinancing thereof;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which against the Parent Borrower Borrower’s or any Subsidiary has actual or anticipated Restricted Subsidiary’s exposure to interest rates (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) including Swap Contracts entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)), foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) with respect to any interest-bearing liability or investment (A) Indebtedness (i) of the Parent Borrower or any Restricted Subsidiary assumed in connection with any acquisition, investment, merger, amalgamation or consolidation in accordance with the terms of this Agreement (provided that such Indebtedness is not incurred in contemplation of such acquisition, investment, merger, amalgamation or consolidation) or (ii) of the Borrower or any Restricted Subsidiary incurred to finance any acquisition, investment, merger, amalgamation or consolidation in accordance with the terms of this Agreement; provided that (x) in the case of any Indebtedness incurred under clause (i) or (ii), immediately after giving effect to the assumption or incurrence of such Indebtedness, on a Pro Forma Basis, the Consolidated Coverage Ratio as of the last day of the most recently ended Test Period is either (1) at least 2.00:1.00 or (2) not less than the Consolidated Coverage Ratio for such Test Period immediately prior to such acquisition, investment, merger, amalgamation or consolidation, (y) in the case of any Indebtedness incurred under clause (ii), such Indebtedness matures after, and does not require any scheduled amortization or other scheduled payments of principal (other than customary AHYDO Catch-Up Payments, and customary offers to repurchase and prepayment events upon a change of control, asset sale or event of loss and customary acceleration rights after an event of default) prior to, the then Latest Maturity Date (provided that such Indebtedness may be incurred in the form of a customary “bridge” or other interim credit facility intended to be refinanced or replaced with long-term indebtedness so long as, subject only to customary conditions the failure of which to be satisfied would otherwise result in an Event of Default, it would either be automatically converted into or required to be exchanged for permanent financing which satisfies the requirements of this clause (y)), and (iiiz) entered into in the case of any Indebtedness incurred under clause (ii), to hedge commoditiesthe extent such Indebtedness is secured, currenciessuch Indebtedness shall be subject to a First Lien Intercreditor Agreement or Second Lien Intercreditor Agreement, general economic conditionsas applicable, raw materials prices, revenue streams or business performanceand (B) any Permitted Refinancing of any Indebtedness incurred under this clause (g);
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent member of the Parent Borrower) Restricted Group incurred in the ordinary course of business and its Restricted Subsidiaries incurred other obligations and liabilities arising under employee benefit plans in the ordinary course of business;
(ji) Indebtedness consisting of unsecured promissory notes issued by any member of the Restricted Group to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) of Holdings permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any DispositionDisposition expressly permitted hereunder, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting servicestreasury, automatic depository, credit card, purchase card, debit card and cash management services or automated clearinghouse arrangementstransfer of funds, overdraft protections overdraft, electronic funds transfers, and other cash management or similar arrangements in each case services incurred in the ordinary coursecourse of business;
(m) Indebtedness of the Borrower or any Restricted Subsidiary, in an aggregate principal amount at any time outstanding under this clause (m) not to exceed the greater of (x) $112,500,000 and (y) 36.15% of Consolidated EBITDA for the most recently ended Test Period (calculated on a Pro Forma Basis);
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangementsarrangements that do not constitute Guarantees, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of businessbusiness and not in connection with the borrowing of money, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness incurred in the ordinary course of business with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof (or within such longer period as is permitted without interest or other charges under the benefit plan which reimbursement is to be made under);
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicepractice and not in connection with the borrowing of money or Swap Contracts;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit[reserved];
(r) (i) other unsecured or junior lien (A) Indebtedness of with respect to the Parent Borrower or any Restricted Subsidiary 2027 Unsecured Notes in an aggregate principal amount not to exceed (A) $1,000,000,000 545,000,000 at the any one time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus outstanding and (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior with respect to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum 2025 Unsecured Notes in an aggregate principal amount of Indebtedness that may be incurred pursuant not to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 370,000,000 at any one time outstanding and (ii) any Permitted Refinancing thereofof any Indebtedness incurred under this clause (r); provided that, in the case of clauses (i) and (ii), such Indebtedness shall not be guaranteed by a Subsidiary that is not a Guarantor of the Obligations;
(sA) Indebtedness incurred issued by the Borrower and in the form of one or more series of senior or subordinated notes or loans (which may be unsecured or secured on a Non-Loan Party, and guarantees thereof by Non-Loan Partyjunior lien basis or, in an aggregate principal amount not the case of notes only, a pari passu basis, in each case issued in a public offering, Rule 144A or other private placement or bridge facility in lieu of the foregoing, or senior or subordinated “mezzanine” debt (which may be in the form of loans or notes and limited to exceed being unsecured or secured solely on a junior lien basis)) (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutionsthe “Incremental Equivalent Debt”); provided that (1i) such Indebtedness is secured by Liens on Incremental Equivalent Debt shall not be subject to the current assets requirement set forth in clause (vi) of Restricted Subsidiaries that are not Loan Parties (and not on the CollateralSection 2.19(b), (2ii) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that Incremental Equivalent Debt (A) such Indebtedness shall not mature earlier be guaranteed by any person other than the Maturity Date applicable to the Term B Loansa Guarantor, (B) as of shall not be secured by any assets other than the date of Collateral, (C) shall not have a Weighted Average Life to Maturity less than the incurrence of such Indebtedness, the remaining Weighted Average Life to Maturity of the then outstanding 2021 New Term Loans (provided that the effects of any scheduled amortization or prepayments made on the 2021 New Term Loans prior to the date of incurring such Indebtedness Incremental Equivalent Debt shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligationsdisregarded), (D) shall have a final maturity no earlier than the Extended Term Loan Maturity Date (provided that such Incremental Equivalent Debt may be incurred in the form of a customary “bridge” or other terms and interim credit facility intended to be refinanced or replaced with long-term indebtedness so long as, subject only to customary conditions the failure of such Indebtedness which to be satisfied would otherwise result in an Event of Default, it would either be automatically converted into or required to be exchanged for permanent financing which satisfies the requirements of this clause (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuanceD)), (E) if such Indebtedness is Incremental Equivalent Debt ranks pari passu in the form right of security, such Incremental Equivalent Debt may participate on a term loan facility of pro rata basis or on a less than pro rata basis (but not on a greater than pro rata basis) in any mandatory prepayments under the Loan Parties and is secured by Documents (provided, however, that any Incremental Equivalent Debt may participate on a Lien greater than pro rata basis, on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth a pro rata basis or on a less than pro rata basis in the proviso to Section 2.14(b)(iiany voluntary prepayments) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) shall not be secured by any Liens except Liens permitted under Section 7.01(cc), (iii) the Parent Borrower has delivered other terms of such Incremental Equivalent Debt (other than (1) provisions applicable only to periods after the Latest Maturity Date (as of the date of incurrence of such Incremental Equivalent Debt) and (2) pricing, fees, rate floors, premiums, optional prepayment or redemption terms (which shall be determined by the Borrower)) are either (I) customary market terms for Indebtedness of such type at the time of incurrence (taken as a whole) (as determined in good faith by the Borrower) or (II) substantially identical to, or when taken as a whole, are not materially more restrictive with respect to the Loan Parties than the terms of the Term Loans (as of the date of incurrence of such Incremental Equivalent Debt), in each case under this clause (iii)(II), unless the then-existing Term Loans (other than any then-existing Term Loans secured on a junior basis to the applicable Incremental Equivalent Debt) (as of the date of incurrence of the Incremental Equivalent Debt) receive the benefit of such more favorable terms through the then Latest Maturity Date (for the avoidance of doubt, it is understood that to the extent any financial maintenance covenant is added for the benefit of such Incremental Equivalent Debt, no consent shall be required from the Administrative Agent or any Lender to the extent that such financial maintenance covenant is also added for the benefit of the Term Loans (other than any then-existing Term Loans secured on a junior basis to the applicable Incremental Equivalent Debt) then outstanding) (provided that a certificate of a Responsible Officer delivered to the Administrative Agent prior to the incurrence of such Incremental Equivalent Debt (or such later date as the Parent BorrowerAdministrative Agent may agree in its discretion), together with all relevant financial information reasonably requested by a reasonable description of the material terms of such Incremental Equivalent Debt or drafts of the material documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirement of this clause (iii) shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent, Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including reasonably detailed calculations demonstrating compliance with clauses (Aa reasonable description of the basis upon which it disagrees)), (B)iv) after giving effect to the incurrence of such Incremental Equivalent Debt, (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an the aggregate principal amount of all Incremental Equivalent Debt (together with all Incremental Term Loans and all Revolving Commitment Increases under Section 2.19(a)) shall not to exceed the greater of (x) $500,000,000 and 346,000,000 (provided that $35,000,000 of such amount under this clause (x) shall solely be available for Revolving Commitment Increases) plus (y) 30.0% an unlimited additional amount, so long as on a Pro Forma Basis after the incurrence of Consolidated EBITDA such Incremental Equivalent Debt (A) if such Incremental Equivalent Debt ranks pari passu in right of security with the Obligations on the Collateral, the First Lien Leverage Ratio as of the Parent Borrower for last day of the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) does not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtednessexceed 3.90:1.00, (iiB) if such Indebtedness is secured by a Lien Incremental Equivalent Debt ranks junior in right of security with the Obligations on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured IndebtednessCollateral, the First Lien Senior Secured Leverage Ratio as of the last day of the most recently ended Test Period does not exceed 3.90:1.00, and (calculated on a Pro Forma BasisC) if such Incremental Equivalent Debt is unsecured, the Consolidated Coverage Ratio as of the last day of the most recently ended Test Period is either at least 2.00:1.00 or not less than the Consolidated Coverage Ratio for such Test Period immediately prior to the incurrence of such Incremental Equivalent Debt under this clause (xC) not greater than 4.00:1.00 or (it being understood that any Incremental Equivalent Debt may be incurred under sub-clause (y) not greater than regardless of whether there is capacity under sub-clause (x)); provided, further, that for purposes of the First Lien calculation of the Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption First Lien Leverage Ratio, as applicable, used in determining the availability of such Indebtedness and (B) if such Indebtedness is a term loan facility Incremental Equivalent Debt under this Section 7.03(s), any cash proceeds of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall Equivalent Debt will not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness netted for purposes of this Section 7.03.of
Appears in 1 contract
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
Documents and, (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount not to exceed $2,250,000,000 1,500,000,000 and, in the case of this clause (ii), any Permitted Refinancing thereof and (iii) the Opco Senior Notes Documents in an aggregate principal amount not to exceed $1,000,000,000 and, in the case of this clause (iii), any Permitted Refinancing thereof;
(c) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (y) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee of any 5 5/8% Senior Notes, Opco Senior Notes or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed 5.0% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed in connection with any Permitted Acquisition so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) $100,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long (i) entered into if such Indebtedness is secured on a junior basis to hedge or mitigate risks the Facilities, the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis is no greater than 6.15 to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary)1.00, (ii) entered into in order if such Indebtedness is secured on a pari passu basis with the Facilities, the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than 5.203.75 to effectively cap, collar 1.00 or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commoditiesif such Indebtedness is unsecured, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of Fixed Charge Coverage Ratio on a consolidated basis for the Parent Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom); provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding 4.25% of Total Assets, in each case to determined at the extent permitted by Section 7.02(y)time of incurrence;
(ih) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of $800,000,000 and 4.0% of Total Assets at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)(y)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv)(y));
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A) and Section 2.14(d)(v)(B), not to exceed $1,500,000,000; provided that such Indebtedness shall (A) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) subject to the Permitted Earlier Maturity Indebtedness Exception, in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party, be subject to the Junior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be (x) in the form of debt securities and (y) subject to the First Lien Intercreditor Agreement and (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding, 4.25% of Total Assets, in each case determined at the time of incurrence;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[Reserved];
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 and (y) 25.010% of Consolidated EBITDA Foreign Subsidiary Total Assets;
(w) unsecured Indebtedness of the Parent Borrower or any Restricted Subsidiary, so long as the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended Test Period four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if such Indebtedness had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and without duplication, Permitted Refinancings of such Indebtedness; provided that any one time outstanding;
(i) such Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary that is not a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerLoan Party, together with all relevant financial information reasonably requested any Indebtedness incurred by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Aa Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), (B7.03(q) or 7.03(s), (C) and (D) and (ii) does not exceed in the aggregate at any Permitted Refinancing thereoftime outstanding, 4.25% of Total Assets, in each case determined at the time of incurrence;
(x) Indebtedness with respect to any arising from Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofIntercompany Activities; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zx) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, divide or classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents, any Senior Notes Documents and any Opco Senior Notes Documents and, in each case, any Permitted Refinancing thereof, will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.03(a).
Appears in 1 contract
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (ClosingFirst Amendment Effective Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the ClosingFirst Amendment Effective Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount in excess of $5,000,000 owed by a Restricted Subsidiary that is not a Loan Party (including a Specified Property Owning Entity) to a Loan Party shall be evidenced by an Intercompany Note and (y) all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) in the case of any Guarantee of Indebtedness of any Restricted Subsidiary that is not a Loan Party by any Loan Party, such Guarantee is permitted under Section 7.02 and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders Lender as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary; provided that (A) in the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party owing to the extent constituting an Investment any Loan Party, such Indebtedness is permitted by under Section 7.02; provided that any amount in excess of $5,000,000 owed by a Restricted Subsidiary that is not a Loan Party (including a Specified Property Owning Entity) to a Loan Party shall be evidenced by an Intercompany Note and (B) all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject evidenced by an Intercompany Note and shall be subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period sale-leaseback transactions and (iii) any Permitted Refinancing of any Indebtedness set forth of the foregoing, in the immediately preceding clauses (i) and (ii); provided that the an aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) at any time outstanding under this Section 7.03(f7.03(e) does not to exceed the greater of (x) $350,000,000 125,000,000 and (y) 20.0% an amount of Consolidated EBITDA Indebtedness that would result in an Incremental Loan-to-Value Ratio of the Parent Borrower for and the Restricted Subsidiaries as of the last day of the most recently ended Test PeriodPeriod on or prior to the date of determination equal to 2.0%, in each case determined at the time of incurrence;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed in connection with any Permitted Acquisition so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that immediately after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, (i) entered into to hedge or mitigate risks to which if Secured Indebtedness, the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests Senior Loan-to-Value Ratio as of the Parent Borrower last day of the most recently ended Test Period on or any Subsidiary), prior to the date of determination is no greater than 45.0% and (ii) entered into in order to effectively cap, collar or exchange interest rates either (from fixed to floating rates, from one floating rate to another floating rate or otherwisex) with respect to any interest-bearing liability or investment the Interest Coverage Ratio of the Parent Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination would be greater than immediately prior to such transactions or (y) after incurring at least $1.00 of additional Indebtedness the Interest Coverage Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination would be equal to or greater than 2.0 to 1.0; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party under this Section 7.03(g), together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q) or 7.03(w), does not exceed in the aggregate an Incremental Loan-to-Value Ratio of the Borrower and (iii) entered into the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancethe date of determination equal to 2.0% at any time outstanding determined at the time of incurrence;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance of the purchase or redemption of Equity Interests of Holdings (Borrower or any direct or indirect parent thereof) permitted by Section 7.06 Restricted Subsidiary under the Senior Notes Indenture and the Newany Senior Notes Indenture in an aggregate principal amount not to exceed $20,000,000 at 12,305 0,000,000 and any one time outstandingPermitted Refinancing thereof;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of treasury services agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements arrangements, in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower and the Restricted Subsidiaries in aggregate principal amount at any time outstanding not to exceed the greater of (x) $250,000,000 and (y) an amount of Indebtedness that would result in an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 4.0%;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) unsecured Indebtedness in an aggregate principal amount, not to exceed when aggregated with the Initial Loans and with the amount of Incremental Loans pursuant to Section 2.14(d)(v)), the greater of (A) $300,000,000 and (B) an unlimited amount so long as the Incremental Loan-to-Value Ratio, determined on a Pro Forma Basis as of the last day of the most recently ended Test Period, as if any Incremental Loans available under such Incremental Commitments had been outstanding on the last day of such period, and, in each case, without netting the cash proceeds of any such Incremental Loans, does not exceed 5.0%;; provided (A) no such Indebtedness may be guaranteed by any Person which is not a Loan Party and (B) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums, call protection and optional prepayment or redemption provisions) that in the good faith determination of the Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (except for any Previously Absent Financial Maintenance Covenant, in which case the Lender shall be given prompt written notice of such Previously Absent Financial Maintenance Covenant and the Loan Document shall be automatically and without further action deemed modified on or prior to the date of incurrence of such Indebtedness to include such Previously Absent Financial Maintenance Covenant for the benefit of, if such Previously Absent Financial Maintenance Covenant is added for the benefit of any Indebtedness in the form of term loans or notes, the Initial Loans, it being understood that upon the amendment of the Loan Document to include any such Previously Absent Financial Maintenance Covenant, any subsequent amendment, modification or waiver to the Loan Document as it pertains to such Previously Absent Financial Maintenance Covenant shall only be made pursuant to Section 10.1) (provided further that, at the option of the Borrower, a certificate of the Borrower as to the satisfaction of the conditions described in this clause (B) delivered at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (B), shall be conclusive unless the Lender notifies the Borrower within such five Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party under this Section 7.03(q), together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g) or 7.03(w), does not exceed in the aggregate an Incremental Loan-to-Value Ratio of the Borrower and the Restricted Subsidiaries as of the last day of the most recently ended Test Period on or prior to the date of determination equal to 2.0% at any time outstanding determined at the time of incurrence;
(r) Indebtedness supported by a Letter letter of Credit credit, in a principal amount not to exceed the face amount of such Letter letter of Creditcredit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional without duplication, Indebtedness in an aggregate principal amount not pursuant to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingSenior REIT Loan Documents;
(v) Indebtedness incurred of Foreign Subsidiaries in an aggregate principal amount at any one time outstanding not to finance or assumed exceed an amount of Indebtedness that would result in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage an Incremental Loan-to-Value Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition Borrower and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Restricted Subsidiaries as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 on or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation date of such Permitted Acquisition determination equal to 1.0% as of any date of incurrence;
(w) unsecured Indebtedness of the Borrower or any Restricted Subsidiary, so long as the Interest Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the incurrence or assumption of such Indebtedness and (B) if date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, determined on a term loan facility pro forma basis (including a pro forma application of the Loan Partiesnet proceeds therefrom), the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (had been incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period and, without duplication, Permitted Refinancings of such Indebtedness; provided that such Indebtedness incurred pursuant (i) shall have a maturity date that is at least 91 days after the Latest Maturity Date at the time such Indebtedness is incurred, (ii) shall have a Weighted Average Life to this clause (B) being referred Maturity not shorter than the longest remaining Weighted Average Life to as “Permitted Credit Facilities Acquisition Debt”) and Maturity of the Facilities, (iii) shall not be subject to scheduled amortization and is not subject to mandatory redemption, repurchase, prepayment or sinking fund obligations (except customary asset sale or change of control provisions that provide for the maximum aggregate principal amount prior repayment in full of the Loans and all other Obligations), in each case on or prior to the Latest Maturity Date at the time such Indebtedness that is incurred, (iv) such Indebtedness may not be incurred pursuant to this clause guaranteed by any Person which is not a Loan Party and (v) shall have terms and Section 7.03(rconditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) by Non-Loan Parties shall not exceed that in the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA good faith determination of the Parent Borrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) (except for any Previously Absent Financial Maintenance Covenant, in which case the Lender shall be given prompt written notice of such Previously Absent Financial Maintenance Covenant and the Loan Document shall be automatically and without further action deemed modified on or prior to the date of incurrence of such Indebtedness to include such Previously Absent Financial Maintenance Covenant for the most recently ended Test Period at benefit of, if such Previously Absent Financial Maintenance Covenant is added for the benefit of any one time outstanding;
(i) Indebtedness (in the form of senior securedterm loans or notes, senior unsecuredthe Initial Loans, senior subordinatedit being understood that upon the amendment of the Loan Document to include any such Previously Absent Financial Maintenance Covenant, any subsequent amendment, modification or subordinated notes or loans) incurred by a Borrower waiver to the extent that 100% Loan Document as it pertains to such Previously Absent Financial Maintenance Covenant shall only be made pursuant to Section 10.1) (provided further that, at the option of the Net Cash Proceeds therefrom areBorrower, immediately after a certificate of the receipt thereof, applied solely Borrower as to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as satisfaction of the date of conditions described in this clause (iv) delivered at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the material terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after drafts of documentation relating thereto, stating that the maturity date of the Term Loans being refinanced) reflect market Borrower has determined in good faith that such terms and conditions on satisfy the date foregoing requirements of issuance and this clause (iv), shall be conclusive unless the Lender notifies the Borrower within such five Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)); provided, further, that any such Indebtedness shall incurred by a Restricted Subsidiary that is not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerLoan Party under this Section 7.03(w), together with all relevant financial information reasonably requested any Indebtedness incurred by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred a Restricted Subsidiary that is not a Loan Party pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(zSections 7.03(g) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a7.03(q) through (y) above. For purposes of determining compliance with this Section 7.03, does not exceed in the event that aggregate an item of Indebtedness meets the criteria of more than one Incremental Loan-to-Value Ratio of the categories of Indebtedness described in clauses (a) through (z) above, Borrower and the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more Restricted Subsidiaries as of the above clauses; provided that all Indebtedness outstanding under last day of the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.most recently ended Test Peri
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantorsdate hereof set forth on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the date hereof; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by Holdings, the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d7.03(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary is a Loan Party and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (ii) any Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by such Loan Party in such Restricted Subsidiary under Section 7.02(c);
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the GuarantyIntercompany Subordination Agreement;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)improvement and any Permitted Refinancing thereof in an aggregate principal amount pursuant to this subclause (i) not to exceed the greater of $46,000,000 and 2.30% of Total Assets, in each case determined at the date of incurrence, (ii) Attributable Indebtedness arising out of sale-leaseback transactions (other than sale-leaseback transactions with respect to any Designated Assets) with respect to properties acquired after the Closing Date and any Permitted Sale Leasebacks Refinancing thereof in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to this sub-clause (ii)) under this Section 7.03(f) does at any time not to exceed the greater of (x) $350,000,000 35,000,000 and (y) 20.01.75% of Consolidated EBITDA Total Assets, in each case, determined at the date of the Parent Borrower for the most recently ended Test Periodincurrence and (iii) Attributable Indebtedness arising out of sale-leaseback transactions with respect to any Designated Assets, and any Permitted Refinancing thereof;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness (i) entered into of any Person that becomes a Restricted Subsidiary after the date hereof, which Indebtedness is existing at the time such Person becomes a Restricted Subsidiary and is not incurred in contemplation of such Person becoming a Restricted Subsidiary that is non-recourse to hedge the Borrower, Holdings or mitigate risks to which any other Restricted Subsidiary (other than any Subsidiary of such Person that is a Subsidiary on the Parent date such Person becomes a Restricted Subsidiary after the date hereof) and is either (A) unsecured or (B) secured only by the assets of such Restricted Subsidiary by Liens permitted under Section 7.01(p) and, in each case, any Permitted Refinancing thereof, and (ii) of the Borrower or any Restricted Subsidiary has actual incurred or anticipated exposure assumed in connection with any Permitted Acquisition that is secured only by Liens permitted under Section 7.01(p) (other than those in respect of shares of capital stock or other equity ownership interests and any Permitted Refinancing of the Parent Borrower or foregoing) and so long as the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Subsidiary), Permitted Refinancing thereof at any time outstanding pursuant to this clause (iig)(ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancedoes not exceed $51,750,000;
(h) Guarantee Obligations with respect toPermitted Pari Passu Secured Debt, or the assumption of, Credit Agreement Refinancing Indebtedness and any Permitted Refinancing of Franchisees, suppliers, distributors or licensees any of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)foregoing Indebtedness;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(k) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary coursecourse of business and any Guarantees thereof;
(n) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $86,250,000 and 4.00% of Total Assets, in each case determined at the time of incurrence; provided that a maximum of the greater of $28,750,000 and 1.45% of Total Assets in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties, in each case determined at the time of incurrence;
(o) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including business consistent with past practice in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (xA) $500,000,000 and (yB) 30.0% the then applicable Borrowing Base at any time outstanding under the ABL Facilities and (ii) the amount of Consolidated EBITDA obligations in respect of any Secured Hedge Agreement and any Secured Cash Management Agreement (in each case, as defined in the ABL Credit Agreement) at any time outstanding and not incurred in violation of Section 7.03(f) and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(s) Indebtedness under the First Lien Term Credit Agreement outstanding on the Closing Date, Permitted Priority Secured Debt and Permitted Refinancings of the Parent Borrower for foregoing;
(t) Indebtedness incurred by a Foreign Subsidiary which, when aggregated with the most recently ended Test Period at principal amount of all other Indebtedness incurred pursuant to this clause (t) and then outstanding, does not exceed $25,875,000;
(u) Permitted Ratio Debt and any one time outstandingPermitted Refinancing thereof;
(v) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of the Restricted Subsidiaries;
(w) Indebtedness in respect of letters of credit issued for the account of any of the Subsidiaries of Holdings to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) purchase of inventory so long as of the most recent Test Period is either (x) not greater than 7.00:1.00 or such Indebtedness is unsecured and (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of such Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall does not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 46,000,000 at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereoftime;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect the case of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofHoldings, Qualified Holding Company Debt; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums and other costs and expenses incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value original issue discount and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness incurred pursuant to the ABL Facilities (and any Permitted Refinancing thereof) may only be incurred pursuant to Section 7.03(r).
Appears in 1 contract
Indebtedness. Create, incurincur or assume any Indebtedness or issue any Disqualified Equity Interest, assume or suffer to exist any Indebtedness, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on or pursuant to binding commitments existing on the Borrowers in respect of Closing Date set forth on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) intercompany Indebtedness outstanding on the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 Closing Date and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subordinated on terms no less favorable to the Lenders than the subordination terms set forth in the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by Holdings, the Parent Borrower and any of its the Restricted Subsidiaries in respect of any Ratably Secured Existing Notesother Indebtedness or other obligations of Holdings, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of the Borrower or any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary may not, by virtue of that is not a Loan Party shall not Guarantee Indebtedness pursuant to this Section 7.03(d), guarantee Indebtedness 7.03(c) that such Immaterial Subsidiary it could not otherwise incur under this Section 7.03); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is by its express terms subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (ii) any Guarantee shall be otherwise permitted as an Investment under Section 7.02;
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to Holdings, the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the GuarantyIntercompany Subordination Agreement;
(fe) (ix) Attributable Indebtedness and relating to any transaction, (y) other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, lease, construction, repair, replacement or improvement of fixed or capital assets (provided that assets, so long as such Indebtedness is incurred substantially concurrently with with, or within two hundred and seventy (270) days after after, the applicable acquisition, lease, construction, repair, replacement or improvement), improvement and (iiz) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)sale-leaseback transactions; provided that the aggregate principal amount of such Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness outstanding incurred pursuant to this clause (ii)e) under this Section 7.03(f) does shall not exceed the greater of (x) $350,000,000 and (y) 20.05.25% of Consolidated EBITDA Total Assets and $5,000,000, in each case determined at the time of the Parent Borrower for the most recently ended Test Periodincurrence;
(gf) Indebtedness in respect of Swap Contracts Contracts; provided that such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;”
(i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), Term Loan Refinancing Debt and (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceRevolving Credit Refinancing Debt;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to current or former officers, directors, managers, consultants and employees members of management and consultants of Holdings, the Parent Borrower (or any direct or indirect parent of and the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current present or former officers, directors, partnersemployees, managersmembers of management and consultants of Holdings, consultants and employeesthe Borrower or any Restricted Subsidiary, their respective estates, spouses or spouses, former spouses spouses, domestic partners and former domestic partners to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereofof Holdings) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting obligations under noncompete agreements, consulting agreements, indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar deferred purchase price or arrangements or adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under incentive, non-compete, consulting, deferred compensation or other similar arrangements with current or former officers, directors, employees, members of management and consultants incurred by such Person in connection with the Transaction and any Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Indebtedness (i) arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five (5) Business Days of its incurrence and (ii) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business and any Guarantees thereof;
(m) Indebtedness of the Borrower or any Restricted Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of 5.25% of Total Assets and $5,000,000, in each case incurred in determined at the ordinary coursetime of incurrence;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of businessbusiness or consistent with past practice, including in respect of workers compensation claimsworkers’ compensation, unemployment insurance and other social security legislation, health, disability or other employee benefits or property, casualty or liability insurance or other insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations (including in respect of letters of credit, bank guarantees guarantees, bankers’ acceptances, warehouse receipts or similar instruments related theretoissued or created in the ordinary course of business or consistent with past practice) in respect of bids, tenders, trade contracts, governmental contracts and leases, statutory obligations, surety, stay, customs, bid, and appeal bonds, performance and return of money bonds, performance and completion guarantees, agreements with utilities and other obligations of a like nature (including those to secure health, safety and environmental obligations), in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding Incremental Equivalent Debt and (ii) any Permitted Refinancing thereof;
(r) Indebtedness assumed in connection with any Permitted Acquisition; provided that (i) such Indebtedness was not incurred in contemplation of such Permitted Acquisition and (ii) both immediately prior to such incurrence and after giving effect thereto no Event of Default shall exist or result therefrom;
(s) [reserved];
(t) Indebtedness incurred by a NonRestricted Subsidiary that is a non-Loan PartyU.S. Subsidiary which, and guarantees thereof by Non-Loan Party, in an aggregate when aggregated with the principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the all other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “and then outstanding, does not exceed the greater of 7.75% of Total Assets and $7,500,000, in each case determined at the time of incurrence;
(u) Permitted Alternative Incremental Facilities Debt”) Ratio Debt of any Loan Party and (ii) any Permitted Refinancing thereof;
(uv) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% any Restricted Subsidiary supported by a Letter of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingCredit;
(vw) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) unsecured Indebtedness in respect of Permitted Debt Exchange Notes obligations of the Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred pursuant to a Permitted Debt Exchange in accordance connection with Section 2.17 open accounts extended by suppliers on customary trade terms in the ordinary course of business and any Permitted Refinancing thereofnot in connection with the borrowing of money; and
(zx) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yw) above. Notwithstanding the foregoing, no Restricted Subsidiary that is a Non-Loan Party will guarantee any Indebtedness for borrowed money of a Loan Party unless such Restricted Subsidiary becomes a Guarantor. For purposes of determining compliance with this Section 7.03any restriction on the incurrence of Indebtedness, the principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03defeased. The accrual of interest, the accretion of accreted value and value, the payment of interest in the form of additional Indebtedness, the payment of dividends on Disqualified Equity Interests in the form of additional shares of Disqualified Equity Interests, accretion or amortization of original issue discount or liquidation preference and increases in the amount of Indebtedness shall outstanding solely as a result of fluctuations in the exchange rate of currencies will not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a consolidated balance sheet of the Borrower dated such date prepared in accordance with GAAP.
Appears in 1 contract
Sources: Credit Agreement (SoulCycle Inc.)
Indebtedness. CreateNone of Holdings, incurthe Borrower or any of its Restricted Subsidiaries shall create, incur or assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness (i) outstanding on the Closing Date (provided that with respect to any Indebtedness in excess of $15,000,000 in the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantorsaggregate, such Indebtedness will only be permitted under this Section 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 if listed on Schedule 7.03(b)) and any Permitted Refinancing thereofthereof and (ii) of Holdings to any Subsidiary of Holdings and of any Subsidiary of Holdings to Holdings or any other Subsidiary of Holdings; provided that, other than in the case of intercompany current liabilities incurred in the ordinary course of business in connection with cash management, tax and accounting operations of Holdings and its Subsidiaries, (x) Indebtedness of any Subsidiary of Holdings that is not a Loan Party owing to a Loan Party shall be (A) subject to Section 7.02 and (B) subject to the subordination provisions of the Security Agreement and (y) any Indebtedness of any Loan Party to a Subsidiary of Holdings that is not a Loan Party shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(c) (i) Guarantees by Holdings, the Borrower and any Restricted Subsidiary in respect of Indebtedness of Holdings, the Parent Borrower and or any of its Restricted Subsidiaries in respect otherwise permitted hereunder; provided that (A) no Guarantee of the Senior Notes or any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on Schedule 7.03(c) the terms set forth herein and (iiiB) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of Holdings, the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of the Borrower) to the extent constituting an Investment permitted by Section 7.02; provided that all no such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject evidenced by a promissory note unless such note is pledged as Collateral to secure the subordination terms set forth in Section 3.01 of the GuarantyObligations;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing to finance the purchase, lease, construction or improvement of property (real or personal) or equipment (whether through the direct purchase of the assets or the Equity Interests of any Person owning such assets) by Holdings, the Borrower or any of its Restricted Subsidiaries prior to or within eighteen (18) months after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset in an aggregate amount not to exceed $25,000,000 (together with any Permitted Refinancing thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts that are incurred in the ordinary course of business (iand not for speculative purposes): (A) entered into to hedge for the purpose of fixing or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange hedging interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) risk with respect to any interest-bearing liability Indebtedness that is permitted to be incurred under Section 7.03; (B) for the purpose of fixing or investment hedging currency exchange rate risk with respect to any currency exchanges; or (C) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;
(g) (i) Indebtedness assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition; provided, further, that the Parent Borrower or aggregate amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties under this Section 7.03(g), together with Indebtedness incurred under Section 7.03(u) below, shall not exceed $50,000,000 at any Subsidiary time outstanding and (iiiii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceany Permitted Refinancing thereof;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of Holdings, the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) of Holdings permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by Holdings, the Parent Borrower or any of its Restricted Subsidiaries arising from agreements providing for indemnification, earn outs, adjustment of purchase price or similar obligations, in each case, incurred in connection with a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the extent constituting indemnification obligations or obligations in respect purpose of purchase price (including earn-outs) or other similar adjustmentsfinancing such acquisition;
(lk) Indebtedness consisting of obligations of Holdings, the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and any Permitted Acquisitions Acquisition or any other Investment expressly permitted hereunder;
(mA) Cash Management Obligations and other Indebtedness in respect of overdraft facilities, employee credit card programs, netting servicesservices or automatic clearing house arrangements or (B) Indebtedness arising from the honoring of a bank or other financial institution of a check, automatic clearinghouse arrangements, overdraft protections and draft or similar arrangements in each case incurred instrument drawn against insufficient funds in the ordinary coursecourse of business, provided that such Indebtedness is extinguished within five Business Days of its incurrence;
(m) Indebtedness of any Loan Party, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed $25,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by Holdings, the Parent Borrower or any of its Restricted Subsidiaries in constituting reimbursement obligations with respect of to letters of credit, credit and bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments guarantees issued or created in the ordinary course of business, including without limitation letters of credit in respect of workers workers’ compensation claims, health, disability or other employee benefits (whether current or former) or property, casualty or liability insurance or self-insurance insurance, or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within thirty (30) days following such drawing;
(p) obligations (including reimbursement obligations with respect to letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion and performance and completion guarantees and similar obligations provided by Holdings, the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicebusiness;
(q) the contemplated Indebtedness described on Schedule 7.03(q);
(r) Indebtedness supported by a Letter of Credit or bank guarantee, in a principal amount not to exceed in excess of the face stated amount of such Letter of CreditCredit or bank guarantee;
(rs) Indebtedness incurred by any Restricted Subsidiaries that are not Loan Parties in an aggregate principal amount not to exceed $25,000,000 at any time outstanding not guaranteed by any Loan Party and any Permitted Refinancing thereof not guaranteed by any Loan Party;
(t) Guarantee obligations (i) incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees or (ii) otherwise constituting Investments permitted by Section 7.02; (u) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or incurred to finance any Restricted Subsidiary Investment permitted under Section 7.02 in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated exceed, together with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)the second proviso to Section 7.03(g) above, (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 50,000,000 at any one time outstanding and (ii) any Permitted Refinancing thereof;
(si) unsecured Indebtedness incurred by a Non-any Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (Dx) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuanceSenior Secured Leverage Ratio, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated determined on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Basis as of the last day of the most recently ended Test Period is either (xfor which financial statements were required to have been delivered pursuant to Section 6.01(a) not greater than 4.00:1.00 or (y) not greater than b), as applicable (or, if no Test Period has passed, as of the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and last four quarters ended), as if the incurrence or assumption of such Indebtedness and (B) if had been made on the last day of such Indebtedness four quarter period, is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted less than or equal to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed 3.25 to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 1.00 and (y) 25.0% of Consolidated EBITDA the Total Leverage Ratio determined on a Pro Forma Basis as of the Parent Borrower for last day of the most recently ended Test Period at any one time outstanding;
for which financial statements were required to have been delivered pursuant to Section 6.01(a) or (i) Indebtedness b), as applicable (in the form of senior securedor, senior unsecuredif no Test Period has passed, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of last four quarters ended), as if the incurrence of such IndebtednessIndebtedness had been made on the last day of such four quarter period, is less than or equal to 0.25 times lower than the Total Leverage Ratio for the applicable Test Period set forth in Section 7.10(a) (i.e. if the required ratio in Section 7.10(a) is 4.25 to 1.0, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered condition to the Administrative Agent a certificate incurrence of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses Indebtedness under this clause (A), (B), (Cv)(i) and (Dshall be 4.00 to 1.0) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Credit Agreement (Res Care Inc /Ky/)
Indebtedness. Create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) (i) Indebtedness of the Parent Borrower any Loan Party under this Agreement (including Indebtedness in respect of any Incremental Facility) and any Permitted Refinancing in respect of its Subsidiaries the Term Loans (any Indebtedness under such Permitted Refinancing, the “First Lien Refinancing Indebtedness”); provided that, (w) such First Lien Refinancing Indebtedness, if secured, is secured only by the Collateral on a pari passu or junior basis with the Obligations under this Agreement (provided that the First Lien Refinancing Indebtedness shall not consist of bank loans that are secured on a pari passu basis with the Obligations under this Agreement), (x) no Loan DocumentsParty that is not originally obligated with respect to repayment of the Indebtedness being refinanced is obligated with respect to the First Lien Refinancing Indebtedness, (y) the terms of any such First Lien Refinancing Indebtedness are (excluding pricing, fees, rate floors and optional prepayment or redemption terms), taken as a whole, no more favorable to the lenders providing such First Lien Refinancing Indebtedness than those applicable to the Indebtedness being refinanced (other than any covenants or other provisions applicable only to periods after the later of the Final Maturity Date and the Final Revolving Termination Date) and (z) such First Lien Refinancing Indebtedness shall be subject to an intercreditor agreement reasonably satisfactory to the Administrative Agent;
(b) Indebtedness of (i) the Borrowers in respect Borrower to any Restricted Subsidiary, (ii) any Subsidiary Guarantor to the Borrower or any other Restricted Subsidiary or (iii) any Restricted Subsidiary that is not a Loan Party to any other Restricted Subsidiary that is not a Loan Party;
(c) Guarantee Obligations incurred by any Group Member of obligations of any Loan Party to the extent such obligations are permitted hereunder; provided that to the extent any such obligations are subordinated to the Obligations, any such related Guarantee Obligations incurred by a Loan Party shall be subordinated to the guarantee of such Loan Party of the Senior Secured Notes Obligations on terms no less favorable to the Lenders than the subordination provisions of the obligations to which such Guarantee Obligation relates;
(d) Indebtedness of any Loan Party under the Second Lien Credit Agreement in an initial principal amount not to exceed $150,000,000 and Guarantees thereof by any Permitted Refinancing thereof;
(e) the GuarantorsExisting Letters of Credit; provided that the aggregate face value of the Existing Letters of Credit shall not exceed $1,250,000 at any time;
(f) Indebtedness (including, without limitation, Capital Lease Obligations and purchase money obligations) to finance the acquisition of fixed or capital assets in an aggregate principal amount not to exceed $2,250,000,000 10,000,000 at any one time outstanding;
(g) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(g) and any Permitted Refinancing thereof;
(ch) Indebtedness pursuant to the Canadian Government Loan not to exceed CDN $672,000 at any time and any guarantees provided in connection therewith;
(i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing NotesSpecified Cash Management Agreements, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may notnetting services, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness overdraft protections and other Indebtedness (including Capitalized Leases) financing the acquisitioncash management, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently intercompany cash pooling and similar arrangements in connection with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiariesdeposit accounts, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or arising under any direct or indirect parent thereof) Swap Agreement permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.11;
(k) Indebtedness incurred by the Parent Borrower (other than for borrowed money) that may be deemed to exist pursuant to any guarantees, warranty or any contractual service obligations, performance, surety, statutory, appeal, bid, prepayment guarantee, payment (other than payment of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outsIndebtedness) or other completion of performance guarantees or similar adjustmentsobligations incurred in the ordinary course of business;
(l) Indebtedness consisting in respect of workers’ compensation claims, payment obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with health, disability or other types of social security benefits, unemployment or other insurance obligations, reclamation and statutory obligations, in each case in the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunderordinary course of business;
(m) Cash Management Obligations and Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseis covered or extinguished within five Business Days;
(n) Indebtedness consisting of (ai) the financing of insurance premiums or self-insurance obligations or (bii) take or take-or-pay obligations contained in supply arrangements, or similar agreements in each case, case in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower client advance or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created deposits received in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performanceany indemnification, bidpurchase price adjustment, appeal and surety bonds and performance and completion guarantees and earn-out or similar obligations provided incurred in connection with Investments permitted by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practiceSection 7.7;
(q) Indebtedness supported acquired by any Group Member in connection with a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) Acquisition; provided, that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (incurred in the form of senior secured, senior unsecured, senior subordinatedconnection with, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur in contemplation of, such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14transaction; provided further, that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of on the date of the incurrence of such Indebtedness, after giving effect to the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is incurrence thereof and otherwise determined on a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is pro forma basis in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu accordance with the Lien securing the Obligations, the terms provisions set forth in the proviso definition of Consolidated EBITDA, the Consolidated First Lien Net Leverage Ratio would not exceed the Consolidated First Lien Net Leverage Ratio then in effect pursuant to Section 2.14(b)(ii7.1 minus 0.25:1.00; provided further that (x) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and is not guaranteed in any respect by the Borrower or any Restricted Subsidiary (F) other than by any such Person that so becomes a Restricted Subsidiary or is the Parent Borrower has delivered to the Administrative Agent a certificate survivor of a Responsible Officer merger with such Person and any of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (Dits Restricted Subsidiaries) and (Ey) (such Indebtedness incurred pursuant Person executes a supplement to this clause (t) being referred the Guarantee and Collateral Agreement to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereofthe extent required under Section 6.10;
(ur) the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person as of such date in accordance with GAAP arising from the Permitted Sale and Leaseback;
(s) additional Indebtedness of the Group Members in an aggregate principal amount (for all Group Members) not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 15,000,000 at any one time outstanding;
(t) Indebtedness pursuant to an arrangement with a Governmental Authority having terms substantially similar to those of the Canadian Government Loan in an aggregate amount not to exceed $5,000,000 at any time and guarantees provided in connection therewith;
(u) time-based licenses of the Borrower or any Subsidiary in the ordinary course of business;
(v) additional senior unsecured Indebtedness incurred and/or unsecured Indebtedness that is subordinated to finance or assumed in connection with a Permitted Acquisition, the Obligations on terms reasonably satisfactory to the Administrative Agent; provided that (i) immediately before and immediately after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated effect on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior pro forma basis to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, no Event of Default shall have occurred and be continuing, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) immediately after giving Pro Forma Effect effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life Borrower shall be in pro forma compliance with the covenant set forth in Section 7.1, such compliance to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, determined (Cx) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed on the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date basis of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has financial information most recently delivered to the Administrative Agent a certificate of a Responsible Officer and the Lenders pursuant to Section 6.1(a) or (b) as though such incurrence had been consummated as of the Parent Borrowerfirst day of the fiscal period covered thereby and (y) disregarding the proceeds of such Indebtedness in calculating such leverage ratio and (iii) immediately after giving effect to the incurrence of such Indebtedness, together the Consolidated Total Net Leverage Ratio shall be less than or equal to 5.00:1.00, with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance such Consolidated Total Net Leverage Ratio determined in accordance with clauses (A), (B), (Cx) and (Dy) and above; provided further that the aggregate amount of Indebtedness incurred in reliance on this clause (iiv) by Restricted Subsidiaries that are not Subsidiary Guarantors shall not exceed $15,000,000; and
(w) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereofSections 7.2(e) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03q).
Appears in 1 contract
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) ABL Credit Agreement in an aggregate principal amount not to exceed $2,250,000,000 475,000,000, (iii) the Dollar Senior Notes Documents in an aggregate principal amount not to exceed $1,040,000,000 and (iv) the Euro Senior Notes Documents in an aggregate principal amount not to exceed €235,000,000 and, in the case of clause (ii), (iii) and (iv), any Permitted Refinancing thereof;
(cb) (i) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the Parent intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) Guarantees by the Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder hereunder; provided that (except that an Immaterial A) no Guarantee (other than Guarantees by a Foreign Subsidiary may notof Indebtedness of another Foreign Subsidiary) of any Senior Notes, by virtue of this Section 7.03(d), the ABL Credit Agreement (other than Canadian Subsidiaries which guarantee Indebtedness that under the ABL Credit Agreement) or any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such Immaterial Subsidiary could not otherwise incur under this Section 7.03); guaranteeing party shall have also provided that, a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of advanced by any Loan Party owed to any Person that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness advanced by any Person that is not a Loan Party to any Loan Party shall be subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of (i) $290,000,000 and (ii) 4.00% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary incurred or assumed in connection with any Permitted Acquisition, and any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the incurrence or assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) $100,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long (i) entered into if such Indebtedness is secured on a junior basis to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary)Facilities, (iiA) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis for the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred or assumed is no greater than 6.00 to 1.00 or (B) the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred or assumed is no greater than the Consolidated Secured Net Leverage Ratio immediately prior to such Permitted Acquisition and the assumption of such Indebtedness, (ii) if such Indebtedness is secured on a pari passu basis with the Facilities, (A) the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred or assumed is no greater than 4.75 to 1.00 or (B) the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred or assumed is no greater than the Consolidated First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition and the assumption of such Indebtedness or (iii) if such Indebtedness is unsecured, (A) the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis (including a pro forma application of the net proceeds therefrom) for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred or assumed would have been no greater than 6.25 to 1.00 or (B) the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis (including a pro forma application of the net proceeds therefrom) for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred or assumed is no greater than the Consolidated Total Net Leverage Ratio immediately prior to such Permitted Acquisition and the assumption of such Indebtedness; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s), 7.03(u) or 7.03(w), does not exceed in the aggregate at any time outstanding the greater of (i) $165,000,000 and (ii) 2.25% of Total Assets, in each case determined at the time of incurrence; provided, further, that any Indebtedness incurred (but not assumed) pursuant to this clause (g) which is secured shall be subject to the extent permitted by Section 7.02(y)requirements included in the first proviso under the definition of “Permitted Ratio Debt”;
(ih) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Borrower or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseBorrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of (i) $290,000,000 and (ii) 4.00% of Total Assets at any time outstanding plus (y) 200% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Borrower or any of its Subsidiaries) of the Borrower or any direct or indirect parent of the Borrower after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Borrower that has been Not Otherwise Applied;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 Business Days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by incurred (x) and secured on a Letter of Credit pari passu basis with the Facilities (“Incremental Equivalent First Lien Debt”) or (y) and secured on a junior Lien basis to the Facilities (“Incremental Equivalent Junior Lien Debt”), in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or each case and any Restricted Subsidiary Permitted Refinancing thereof, in an aggregate principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to under this clause (A) (q), when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A) and Incremental Equivalent Unsecured Debt incurred pursuant to this clause Section 7.03(u), not to exceed the Incremental Base Amount; provided that such Indebtedness shall (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)x) above, (1) such Indebtedness shall not mature prior to the have a maturity date that is 91 after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) in the case of the Term B Loans or clause (x) above, have a Weighted Average Life to Maturity less not shorter than the longest remaining Weighted Average Life to Maturity of the Term B Loans plus 91 daysFacilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (2C) if such Indebtedness shall not have mandatory prepaymentis incurred or guaranteed on a junior lien basis by a Loan Party with respect to Collateral, redemption or offer to purchase events more onerous than those applicable be subject to the Term B LoansJunior Lien Intercreditor Agreement and, if the Indebtedness is secured on a pari passu basis with the Facilities, be subject to the First Lien Intercreditor Agreement and the ABL Intercreditor Agreement and (3D) the other have terms and conditions of such Indebtedness (excluding pricing other than (x) pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 provisions and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date Latest Maturity Date at the time of incurrence of such Indebtedness and to the extent any financial maintenance covenant is added for the benefit of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, to the extent that such financial maintenance covenant is also added for the benefit of each Facility remaining outstanding after the incurrence or issuance of such Incremental Equivalent First Lien Debt or Incremental Equivalent Junior Lien Debt, as applicable) that (1) in the good faith determination of the Term Loans being refinancedBorrower are not materially less favorable (when taken as a whole) to the Borrower than the terms and conditions of the Loan Documents (when taken as a whole) or reflect market terms and conditions on (taken as a whole) at the date time of incurrence or issuance (provided that a certificate of the Borrower as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with or drafts of documentation relating thereto, stating that the Term Loans and (E) the Parent Borrower has delivered to determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Borrower within such five (5) Business Day period that it disagrees with such determination (including a certificate of a Responsible Officer description of the Parent Borrowerbasis upon which it disagrees)) or (2) are otherwise as agreed between the Borrower and the lender, holder or other provider of such Indebtedness; provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with all relevant financial information reasonably requested any Indebtedness incurred by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Aa Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), (B7.03(s), 7.03(u) or 7.03(w), does not exceed in the aggregate at any time outstanding, the greater of (Ci) and (D) $165,000,000 and (ii) 2.25% of Total Assets, in each case determined at the time of incurrence and any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan DocumentsDocuments (including for the avoidance of doubt any Incremental Term Loans or Revolving Commitment Increase);
(b) Indebtedness of (i) outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing refinancing thereof and (ii) intercompany Indebtedness outstanding on the Closing Date and any refinancing thereof, of which any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee of any Mezzanine Debt or Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower any Loan Party or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyevidenced by an Intercompany Note;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)asset in an aggregate amount not to exceed $30,000,000 (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against the Borrower’s or mitigate any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary has actual (A) assumed in connection with any Permitted Acquisition, provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof or anticipated exposure (B) incurred to finance a Permitted Acquisition and any Permitted Refinancing thereof; provided that (w) in the case of clauses (A) and (B), such Indebtedness and all Indebtedness resulting from a Permitted Refinancing thereof is unsecured (except for Liens permitted by Section 7.01(w) securing Indebtedness (together with Permitted Refinancings thereof) incurred pursuant to clause (A) in an aggregate principal outstanding not to exceed $75,000,000 and Liens securing Indebtedness incurred pursuant to clause (A) permitted by Section 7.01(bb)), (x) in the case of clauses (A) and (B), both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom (other than those a Permitted Acquisition made pursuant to a legally binding commitment entered into at a time when no Default exists or would result therefrom), and (2) the Borrower and the Restricted Subsidiaries will be in respect Pro Forma Compliance with the covenants set forth in Section 7.11 and (y) in the case of shares of capital stock any such incurred Indebtedness under clause (B), such Indebtedness matures after, and does not require any scheduled amortization or other equity ownership interests scheduled payments of principal prior to, the seventh anniversary of the Parent Borrower or any Subsidiary)Closing Date; provided, (iifurther, that the amount of Indebtedness incurred by Restricted Subsidiaries that are not Loan Parties under this Section 7.03(g) entered into shall not exceed $50,000,000 in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceaggregate;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outscustomary earnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction Transactions, and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts in the ordinary coursecourse of business;
(m) Indebtedness of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed $125,000,000;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the due date thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness constituting the Mezzanine Debt and any Permitted Refinancing thereof;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary Permitted Notes in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (principal amount, when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred Incremental Term Loans and Revolving Commitment Increases pursuant to this clause Section 2.14, not to exceed $150,000,000,350,000,000, (Aii) that are consummated to the extent Permitted Notes may not be issued in reliance on Section 7.03(r)(ii) below) plus the foregoing subclause (B) unlimited additional unsecured or junior lien Indebtednessi), so long as either Permitted Notes that are (x) the Total Leverage Ratio (calculated secured on a Pro Forma Basis) as of pari passu basis with the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, Obligations in an aggregate principal amount that would not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on cause the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral)First Lien Secured Leverage Ratio, (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated determined on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Basis as of the last day of the most recently ended Test Period is either for which financial statements were required to have been delivered pursuant to Section 6.01(a) or (x) not greater than 4.00:1.00 b), as applicable (or, if no Test Period has passed, as of the last four quarters ended), as if such Permitted Notes had been outstanding on the last day of such four quarter period, to exceed 2.753.50 to 1.00 or (y) not greater than unsecured or secured on a junior basis with the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred Obligations in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall would not exceed cause the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA Total Leverage Ratio, determined on a Pro Forma Basis as of the Parent Borrower for last day of the most recently ended Test Period at any one time outstanding;
for which financial statements were required to have been delivered pursuant to Section 6.01(a) or (ib), as applicable (or, if no Test Period has passed, as of the last four quarters ended), as if such Permitted Notes had been outstanding on the last day of such four quarter period, to exceed 5.25 to 1.00, (iii) Indebtedness (in Permitted Notes, the form Net Proceeds of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower which are applied to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment permanent repayment of Term Loans in accordance with pursuant to Section 2.05(b)(iii), (iv) Permitted Notes that are offered on a pro rata basis to all Lenders that are “Qualified Institutional Buyers” (as defined in Rule 144A under the Securities Act of 1933, as amended) holding Term Loans and in a principal amount not to exceed the amount of Term Loans exchanged for such Permitted Notes pursuant to procedures reasonably acceptable to the Administrative Agent (including procedures designed to comply with securities laws); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant any Term Loans being refinancedexchanged for such Permitted Notes shall be deemed to have been repaid immediately upon the effectiveness of such exchange, and (Bv) as in the case of Permitted Notes incurred under any of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with foregoing clauses (Ai), (Bii), (Ciii) and (D) and (ii) any iv), Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing Refinancings thereof; and
(zt) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (ys) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zt) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (a) of this Section 7.03 7.03, and the Senior Secured Notes (ii) all Indebtedness constituting Mezzanine Debt will be deemed to have been incurred be outstanding in reliance only on the exception set forth in clause (cq) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower any Loan Party under this Agreement (including Indebtedness in respect of any Incremental Term Facility) and any Permitted Refinancing Indebtedness in respect of its Subsidiaries the Term Loans (any such Permitted Refinancing Indebtedness, the “Term Loan Refinancing Indebtedness”); provided that (i) such Term Loan Refinancing Indebtedness, if secured, is secured only by the Collateral on a pari passu or junior basis with the Obligations under this Agreement (provided that the Term Loan DocumentsRefinancing Indebtedness shall not consist of syndicated term loans that are secured on a pari passu basis with the Obligations under this Agreement), (ii) no Person, other than a Loan Party, shall be an obligor or guarantor with respect to any Term Loan Refinancing Indebtedness, (iii) the terms of any such Term Loan Refinancing Indebtedness (excluding pricing, fees, rate floors and optional prepayment or redemption terms) reflect market terms at the time of issuance thereof (but in no event shall any Term Loan Refinancing Indebtedness have covenants and defaults, taken as a whole, materially more restrictive than those applicable to the Indebtedness being refinanced (other than any covenants or other provisions applicable only to periods after the Latest Maturity Date (as in effect on the date of incurrence of such Term Loan Refinancing Indebtedness))), (iv) such Term Loan Refinancing Indebtedness shall share ratably or less than ratably with (or, if junior in right of payment or as to security, on a junior basis with respect to) any prepayments or repayments of the Term B Loans (and Incremental Term Loans, if applicable) and (v) such Term Loan Refinancing Indebtedness, if secured, shall be subject to intercreditor arrangements reasonably satisfactory to the Administrative Agent;
(b) Indebtedness of the Borrowers in respect of Loan Parties under the Senior Secured Notes (and Guarantees thereof by the Guarantors) ABL Credit Agreement in an aggregate principal outstanding amount not to exceed $2,250,000,000 200,000,000 and any Permitted Refinancing Indebtedness in respect thereof;
(c) Indebtedness of (i) Indebtedness of the Parent Borrower and to any of its Restricted Subsidiaries in respect of any Ratably Secured Existing NotesSubsidiary, (ii) Surviving Indebtedness listed on Schedule 7.03(c) any Subsidiary Guarantor to the Borrower or any other Restricted Subsidiary and (iii) any Permitted Refinancing Restricted Subsidiary that is not a Subsidiary Guarantor to any other Restricted Subsidiary that is not a Subsidiary Guarantor; provided that (x) any Indebtedness of any Loan Party shall be unsecured and shall be subordinated in right of payment to the foregoingObligations on terms customary for intercompany subordinated Indebtedness, as reasonably determined by the Administrative Agent, and (y) any such Indebtedness owing to any Loan Party shall be evidenced by a promissory note which shall have been pledged pursuant to the Guarantee and Collateral Agreement;
(d) Guarantee Obligations incurred by any Group Member of obligations of any Group Member to the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that extent such Immaterial Subsidiary could obligations are not otherwise incur under this Section 7.03)prohibited hereunder; provided that, if that (i) to the Indebtedness being guaranteed is extent any such obligations are subordinated to the Obligations, any such related Guarantee Obligation Obligations incurred by a Loan Party shall be subordinated to the Guarantee guarantee of such Loan Party of the Obligations on terms at least as no less favorable to the Lenders as those contained in than the subordination of such Indebtedness;
(e) Indebtedness provisions of the Parent Borrower or obligations to which such Guarantee Obligation relates and (ii) any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted Guarantee Obligations incurred by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person of obligations of a Restricted Subsidiary that is not a Loan Party shall be subject permitted to the subordination terms set forth extent permitted pursuant to Section 7.7(g)(iii), Section 7.7(t) or Section 7.7(u);
(e) Indebtedness outstanding on the Closing Date and listed on Schedule 7.2(e) and any Permitted Refinancing Indebtedness in Section 3.01 of the Guarantyrespect thereof;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized LeasesCapital Lease Obligations) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270secured by Liens permitted by Section 7.3(g) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xi) $100,000,000 25,000,000 and (yii) 6.01.00% of Consolidated EBITDA Total Assets (as of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (iidate incurred); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees or directors of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jh) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary coursecourse of business and owed in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-house transfers of funds;
(ni) Indebtedness consisting arising under any Swap Agreement permitted by Section 7.11;
(j) Indebtedness (other than for borrowed money) that may be deemed to exist pursuant to any guarantees, warranty or contractual service obligations, performance, surety, statutory, appeal, bid, prepayment guarantee, payment (other than payment of (aIndebtedness) the financing or completion of insurance premiums performance guarantees or (b) take or pay similar obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(ok) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankersworkers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, payment obligations in connection with health, disability or other employee benefits or propertytypes of social security benefits, casualty or liability insurance or self-insurance unemployment or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performanceinsurance obligations, bid, appeal reclamation and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretostatutory obligations, in each case in the ordinary course of business or consistent with past practicebusiness;
(ql) Indebtedness supported arising from the honoring by a Letter bank or other financial institution of Credit in a principal amount not to exceed the face amount of check, draft or similar instrument drawn against insufficient funds, so long as such Letter of CreditIndebtedness is covered or extinguished within five Business Days;
(rm) Indebtedness consisting of (i) the financing of insurance premiums or self-insurance obligations or (ii) take-or-pay obligations contained in supply or similar agreements in each case in the ordinary course of business;
(n) Indebtedness in the form of purchase price adjustments (including in respect of working capital), earnouts, deferred compensation, indemnification or other unsecured arrangements representing acquisition consideration or junior lien deferred payments of a similar nature incurred in connection with any Permitted Acquisitions or other Investments permitted under Section 7.7 (other than Investments permitted under clause 7.7(s)) or Dispositions permitted under Section 7.5 (other than Dispositions permitted under Section 7.5(m));
(i) Indebtedness of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Parent Borrower or a Restricted Subsidiary in a transaction permitted hereunder) after the Closing Date, or Indebtedness of any Person that is assumed by the Borrower or any Restricted Subsidiary in connection with an aggregate amount not to exceed acquisition of assets by the Borrower or such Restricted Subsidiary in a Permitted Acquisition; provided that (Ax) $1,000,000,000 such Indebtedness exists at the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assets being acquired and (y) with respect to any Indebtedness of any incurrence pursuant to this clause Person that becomes a Restricted Subsidiary or that is merged or consolidated with or into the Borrower or a Restricted Subsidiary, such Indebtedness is not guaranteed in any respect by the Borrower or any Restricted Subsidiary (Aother than by any such Person that so becomes a Restricted Subsidiary or is the survivor of a merger with such Person and any of its Subsidiaries) and (when aggregated with the amount of ii) Permitted Refinancings Refinancing Indebtedness in respect of Indebtedness originally incurred pursuant such Indebtedness; provided that after giving effect to this clause the applicable acquisition (Aor merger or consolidation) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien such assumption of Indebtedness, so long as either (x) the Total Consolidated Leverage Ratio (for the Applicable Reference Period, calculated on a Pro Forma Basis) Basis as of the end date of the most recent Test Period such acquisition (or merger or consolidation) or assumption, is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end in excess of the most recent Test Period is not less than 2.00:1.003.25 to 1.00; provided further that, in that the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateraloutstanding under this Section 7.2(o), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness of Subsidiaries that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-are not Loan Parties outstanding under Section 7.2(w), shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 50,000,000 at any one time outstandingtime;
(ip) Indebtedness (in of any Restricted Subsidiary to the form of senior secured, senior unsecured, senior subordinated, Borrower or subordinated notes or loans) incurred by a Borrower any other Loan Party to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested permitted by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (ASection 7.7(g)(iii), (B), (CSection 7.7(t) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.Section
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (date hereof and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the date hereof;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d7.03(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided thatthat (A) no Guarantee by any Restricted Subsidiary of any High Yield Note, Subordinated Lien Facility or Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 5.03 of the GuarantySecurity Agreement;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable such Indebtedness incurred pursuant to this clause (ii)e) under this Section 7.03(f) does and outstanding at any one time shall not exceed the greater of (x) $350,000,000 100,000,000 and (y) 20.02.5% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodTotal Assets;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness assumed in connection with any Permitted Acquisition, provided that (x) such Indebtedness (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those was not incurred in respect contemplation of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary)such Permitted Acquisition, (ii) entered into is secured only by the assets acquired in order to effectively capthe applicable Permitted Acquisition (including any acquired Equity Interests), collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwiseiii) the only obligors with respect to any interest-bearing liability Indebtedness incurred pursuant to this clause (g) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition, and (y) both immediately prior and after giving effect thereto no Default shall exist or investment result therefrom;
(i) Indebtedness (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) of the Parent Borrower or any Restricted Subsidiary incurred to finance a Permitted Acquisition and (iiiii) entered into any Permitted Refinancing of the foregoing; provided, that in the case of each of (i) and (ii) above, such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (w) is unsecured or is subordinated to hedge commoditiesthe Obligations on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the Closing Date, currencies(x) both immediately prior and after giving effect thereto, general economic conditionsno Default shall exist or result therefrom, raw materials prices(y) matures after, revenue streams and does not require any scheduled amortization or business performance;
other scheduled payments of principal prior to, the Maturity Date of the Term Loans (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (z) hereof) and (z) has terms and conditions (other than interest rate and redemption premiums), taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Senior Subordinated Notes as of the Closing Date; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees); and provided further that notwithstanding anything contained in the Loan Documents to the contrary, (a) the only obligors with respect to any Indebtedness incurred pursuant to clause (A) of this paragraph or any Permitted Refinancing of Indebtedness in respect thereof shall be those Persons who were obligors of such Indebtedness immediately prior to such Permitted Acquisition and (b) Restricted Subsidiaries that are Non-Loan Parties may not incur Indebtedness pursuant to this clause (h) Guarantee Obligations with respect to, or the assumption of, Indebtedness in an aggregate outstanding amount in excess of Franchisees, suppliers, distributors or licensees 5% of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)Foreign Subsidiary Total Assets;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its the Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(k) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its the Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseconnection with deposit accounts;
(n) Indebtedness in an aggregate principal amount not to exceed $250,000,000 at any time outstanding; provided that a maximum of $100,000,000 in aggregate principal amount of such Indebtedness may be incurred by Non-Loan Parties;
(o) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) Indebtedness incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of its Restricted Subsidiaries;
(s) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rt) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms High Yield Notes and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;[Intentionally omitted]
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 100,000,000 and (y) 25.05% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingForeign Subsidiary Total Assets;
(i) Indebtedness (under a Subordinated Lien Facility in an aggregate principal amount not to exceed $200,000,000 at any time outstanding; provided that at the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% time of the Net Cash Proceeds therefrom areincurrence of such Indebtedness and after giving Pro Forma Effect thereto, immediately after no Default exists or would result therefrom, and (ii) Permitted Refinancings in respect thereof; provided that the receipt thereof, applied solely amount of Indebtedness incurred pursuant to this clause (w) shall reduce on a dollar-for-dollar basis the prepayment Incremental Availability;
(x) Unsecured Indebtedness of Term Loans in accordance with Section 2.05(b)(iii)the Borrower or any Restricted Subsidiary; provided that (A) both immediately prior and after giving Pro Forma Effect to such Indebtedness incurrence no Default or Event of Default shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, exist or result therefrom and (B) if such Indebtedness is subordinated to the Obligations, it is done so on terms no less favorable to the Lenders than the subordination terms set forth in the Senior Subordinated Notes Indenture as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables FinancingClosing Date;
(y) Indebtedness in respect of Permitted Debt Exchange Notes the Borrower or any Restricted Subsidiary incurred pursuant to finance a Permitted Debt Exchange Acquisition; provided that, both immediately prior to and after giving effect thereto, (i) no Default shall exist or result therefrom and (ii) the Borrower shall be in accordance compliance with Section 2.17 and any Permitted Refinancing thereofthe Senior Secured Incurrence Test (calculated on a Pro Forma Basis); and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that (i) all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred on such date in reliance only on the exception in clause (a) of this Section 7.03 7.03, and (ii) all Indebtedness outstanding under the Senior Secured High Yield Notes will be deemed to have been incurred on such date in reliance only on the exception set forth in of clause (ct) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) Indebtedness outstanding on the Closing Date (i) not in excess of $3,000,000 in the Borrowers aggregate (when taken together with all other indebtedness outstanding in respect of the Senior Secured Notes reliance on this clause (and Guarantees thereof by the Guarantorsb)(i)) in an aggregate principal amount not to exceed $2,250,000,000 or (ii) listed on Schedule 7.03(b) and any Permitted Refinancing thereof; provided that all such Indebtedness of any Loan Party owed to any Restricted Subsidiary that is not a Loan Party shall be subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness Guarantees by any Borrower or any other Restricted Subsidiary of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent any Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial and cross-guarantees of guarantees by the Parent of Indebtedness of any Borrower or any Restricted Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03permitted hereunder); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Indebtedness constituting a Specified Junior Financing Obligation shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated in right of payment to the Obligations, such Guarantee Obligation shall be subordinated in right of payment to the Guarantee of the Obligations on terms (taken as a whole) at least as favorable (as reasonably determined by the Lead Borrower) to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary of the Parent owing to any Loan Party (other than the extent constituting Parent) or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party (other than the Parent) which is substantially contemporaneously transferred to a Loan Party (other than the Parent) or any Restricted Subsidiary of the Parent that is a Loan Party); provided that in the case of Indebtedness of a non-Loan Party owing to a Loan Party such Indebtedness (x) is an Investment permitted by Section 7.027.02(c)(iii), (y) consists of any part of a Permitted Tax Restructuring or (z) is in an amount not to exceed the greater of $7,050,000 or 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma basis); provided provided, further, that (x) no such Indebtedness owed to a Loan Party shall be 136 evidenced by a promissory note unless such promissory note is pledged to the Administrative Agent in accordance with, and subject to, the terms of the Security Agreement and (y) all such Indebtedness of any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject subordinated to the Obligations pursuant to subordination terms set forth in Section 3.01 substantially consistent with the terms of the GuarantyIntercompany Note and (z) any subsequent issuance or transfer of any Equity Interests or any event that results in any Restricted Subsidiary lending such Indebtedness or any other subsequent transfer of any such Indebtedness (except to a Borrower or another Restricted Subsidiary) shall be deemed, in each case, to be an incurrence of Indebtedness not permitted by this clause (d);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the an acquisition, construction, repair, replacement replacement, lease or improvement of a fixed or capital assets (provided that such Indebtedness is asset incurred concurrently with by any Borrower or any Restricted Subsidiary prior to or within two hundred seventy (270) 270 days after the applicable acquisition, construction, repair, replacement lease or improvementimprovement of the applicable asset thereof in an aggregate amount not to exceed the greater of $9,400,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis), in each case, determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, and (ii) Attributable Indebtedness arising out of sale-leaseback transactions permitted by Section 7.05(m) and any Permitted Sale Leasebacks Refinancing of such Attributable Indebtedness in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 4,700,000 and (y) 6.010% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period and (iiicalculated on a Pro Forma Basis) at any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to time under this clause (iie)(ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge against any Borrower’s or mitigate any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks to which incurred in the Parent ordinary course of business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of any Borrower or any Restricted Subsidiary has actual or anticipated exposure (other than those assumed in respect of shares of capital stock connection with any Permitted Acquisition or other equity ownership interests Investment permitted by Section 7.02 or Capital Expenditures (provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition or any Permitted Refinancing thereof); provided that the aggregate amount of such Indebtedness does not exceed the greater of $9,400,000 and 20% of Consolidated EBITDA as of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment last day of the Parent Borrower or most recently ended Test Period (calculated on a Pro Forma Basis) at any time outstanding; provided, further, that the aggregate principal amount of any such Indebtedness assumed under this clause (g) by any Restricted Subsidiary that is not a Loan Party shall not exceed the greater of $4,700,000 and 10% of Consolidated EBITDA as of the last day of the most recently ended Test Period (iiicalculated on a Pro Forma Basis) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performanceat any time outstanding;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation or similar arrangements to employees of the Parent Borrower (Borrowers or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by any Borrower or any of the other Restricted Subsidiaries of the Parent to current or former officers, directors, partners, managers, consultants consultants, advisors, directors and employees, their respective estates, spouses or former spouses of Parent (or any direct or indirect parent thereof) and any Restricted Subsidiary to finance the purchase or redemption of Equity Interests of Holdings (the Lead Borrower or any direct or indirect parent thereof) of the Lead Borrower permitted by Section 7.06 7.06;
(j) Indebtedness incurred by any Borrower or any of the other Restricted Subsidiaries of the Parent in an aggregate amount connection with the Transactions, a Permitted Acquisition, any other Investment, merger or Disposition permitted hereunder or transaction with Affiliates permitted hereunder, in each case, constituting indemnification obligations or obligations in respect of deferred purchase price (including earn-outs and seller paper) or other similar adjustments which, solely in the case of seller paper, shall not to exceed the greater of $20,000,000 9,400,000 and 20% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding;
(k) Indebtedness incurred by the Parent consisting of obligations of any Borrower or any of its the other Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements (in each 137 case other than in respect of deferred purchase price (including, without limitation, earn-outs and seller paper)) incurred by such Person in connection with the Transaction and Transactions, Permitted Acquisitions Acquisitions, transactions with Affiliates or any other Investment expressly Investment, in each case, permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business, so long as such Indebtedness is extinguished within 10 Business Days of its incurrence;
(m) Indebtedness in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $7,050,000 and 15% of Consolidated EBITDA as of the last day of the most recently ended Test Period (calculated on a Pro Forma Basis);
(n) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent any Borrower or any of its the other Restricted Subsidiaries of the Parent in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of self-insurance, performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent any Borrower or any of its the other Restricted Subsidiaries of the Parent or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practicepractice or to the extent required by Laws or pursuant to any statutory filing;
(q) Indebtedness supported by a Letter letters of Credit credit (i) issued in a principal an aggregate amount at any time outstanding not to exceed the face $6,000,000 and (ii) constituting trade letters of credit in an aggregate amount of such Letter of Creditat any time outstanding not to exceed $1,500,000;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof[Reserved];
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria[Reserved];
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[Reserved];
(v) Indebtedness incurred to finance by any Borrower or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as any of the most recent Test Period is either (x) other Restricted Subsidiaries of the Parent in favor of any Governmental Authority in an amount outstanding not to exceed the greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition $5,000,000 and the incurrence or assumption 10% of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Consolidated EBITDA as of the last day of the most recently ended Test Period is either (calculated on a Pro Forma Basis) at any time outstanding;
(w) [Reserved];
(x) not greater than 4.00:1.00 or [Reserved];
(y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation Indebtedness of such Permitted Acquisition any Borrower and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility any other Restricted Subsidiaries of the Loan PartiesParent in respect of any Supplier Financing Facilities in the ordinary course of business;
(z) Indebtedness (a) of any Securitization Subsidiary arising under any Qualified Securitization Financing at any time, (b) of any Borrower or any other Restricted Subsidiary of the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred arising under any Receivables Facility or (c) in reliance on, Section 2.14, and the terms set forth connection with accounts receivable factoring facilities in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such ordinary course of business; provided that the aggregate amount of Indebtedness incurred pursuant to this clause (Bz) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 11,750,000 and (y) 25.025% of Consolidated EBITDA as of the Parent Borrower for last day of the most recently ended Test Period (calculated on a Pro Forma Basis) at any one time outstanding;
(iaa) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof[Reserved];
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Credit Agreement (Redwire Corp)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of (x) any Loan Party under (i) the Parent Loan Documents and (y) the Second Lien Obligations in an aggregate amount not to exceed $120,000,000 and any Permitted Refinancing thereof and (y) of the Borrower and or any of its Subsidiaries under the Loan Documents(i) any Secured Hedge Agreements and (ii) any Treasury Services Agreements;
(b) (i) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Obligations pursuant to an Intercompany Note;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee of any Second Lien Term Loans or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guaranty of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all any such Indebtedness of any owing to a Restricted Subsidiary that is not a Loan Party owed is subordinated in right of payment to the Loans (for the avoidance of doubt, any Person such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be subject deemed to be expressly subordinated in right of payment to the subordination Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease or improvement of a fixed or capital asset incurred by the Borrower or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of $15,000,000 and 1.2% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xLeaseback Transactions permitted by Section 7.05(l) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower or any Restricted Subsidiary (x) incurred or (y) assumed in connection with any Permitted Acquisition or similar Investment so long as, in the case of Indebtedness assumed pursuant to clause (y) hereof, such Indebtedness is not incurred in contemplation of such Permitted Acquisition or similar Investment, and any Permitted Refinancing thereof; provided that, after giving Pro Forma Effect to such Permitted Acquisition or similar Investment and the assumption of such Indebtedness, so long as (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of Fixed Charge Coverage Ratio on a consolidated basis for the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been at least 2.00 to 1.00, in each case determined on a Pro Forma Basis (including a pro forma application of the net proceeds therefrom), or (ii) if such Indebtedness is unsecured, the Fixed Charge Coverage Ratio on a consolidated basis for the Borrower and its Restricted Subsidiaries’ most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date on which such Indebtedness is incurred would have been greater than or equal to the extent permitted Fixed Charge Coverage Ratio immediately prior to such Permitted Acquisition or similar investment, determined on a Pro Forma Basis (including a pro forma application of the net proceeds therefrom), or (iii) if such Indebtedness is secured on a pari passu or junior lien basis with the Obligations, the Consolidated Secured Net Leverage Ratio determined on a Pro Forma Basis would be lower than or equal to immediately prior thereto; provided that in the case of Indebtedness secured on a pari passu basis with the Obligations, (i) if such Indebtedness is borrowed or issued by any Loan Party, it shall not be guaranteed by any Person that is not a Loan Party or secured by any assets other than the Collateral, (ii) such Indebtedness shall not have a shorter Weighted Average Life to Maturity than the remaining Weighted Average Life to Maturity of the Term Loans or a maturity date earlier than the then-existing Latest Maturity Date, (iii) such Indebtedness shall be subject to a First Lien Intercreditor Agreement and (iv) in the case of such Indebtedness that is in the form of loans, the All-In Yield for such loans shall be subject to the “most favored nation” requirements set forth in Section 7.02(y2.14(e)(iii), as applicable;
(ih) Indebtedness representing deferred compensation to current or former officers, directors, managers, employees and consultants (or their respective estates, spouses or former spouses) of the Parent Borrower any Loan Party (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness to then-current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) of the Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred the ordinary course of business and any Guarantees thereof or the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary coursecourse of business, so long as such Indebtedness is extinguished in the ordinary course of business;
(m) Indebtedness of the Borrower or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the amount of Excluded Contributions previously received pursuant to clause (3) of the definition of “Excluded Contributions” and that (i) the Borrower elects to apply under this clause (m) and (ii) do not increase the Cumulative Credit, to the extent Not Otherwise Applied;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) (i) senior, senior subordinated or subordinated Indebtedness not to exceed (a) the Shared Fixed Incremental Amount plus (b) an additional amount so long as (A) no Event of Default exists (or would result therefrom) and (B) (x) if such Indebtedness is secured on a first lien basis, the Consolidated First Lien Net Leverage Ratio would not exceed 3.95:1.00; (y) if such Indebtedness is secured on a second or junior lien basis, the Consolidated Secured Net Leverage Ratio would not exceed 5.45:1.00; and (z) if such Indebtedness is unsecured or secured by assets of Non-Loan Parties that are not part of the Collateral, the Fixed Charge Coverage Ratio would not exceed 2.00:1.00, in each case calculated after giving Pro Forma Effect thereto and to the use of proceeds thereof (but without netting the proceeds thereof) as of the last day of the most recently ended Test Period; provided, further, that in the case of any such Indebtedness of the Loan Parties incurred pursuant to clause (B)(x) above, (i) if such Indebtedness is borrowed or issued by any Loan Party, it shall not be guaranteed by any Person that is not a Loan Party or secured by any assets other than the Collateral, (ii) such Indebtedness shall not have a shorter Weighted Average Life to Maturity than the remaining Weighted Average Life to Maturity of the Term Loans or a maturity date earlier than the then-existing Latest Maturity Date, (iii) such Indebtedness shall (1) rank pari passu in right of payment and pari passu with respect to security with the Facilities and (2) be subject to a First Lien Intercreditor Agreement and (iv) in the case of such Indebtedness that is in the form of loans, the All-In Yield for such loans shall be subject to the “most favored nation” requirements set forth in Section 2.14(e)(iii), as applicable; provided, further, that in the case of any such Indebtedness of the Loan Parties incurred pursuant to clause (B)(y) above, (i) if such Indebtedness is borrowed or issued by any Loan Party, it shall not be guaranteed by any Person that is not a Loan Party or secured by any assets other than the Collateral, (ii) such Indebtedness shall not have a shorter Weighted Average Life to Maturity than the remaining Weighted Average Life to Maturity of the Term Loans or a maturity date prior to the date that is 91 days after the then-existing Latest Maturity Date applicable to the Term Loans and (iii) such Indebtedness shall (1) rank junior in right of payment and junior with respect to security with the Facilities and (2) be subject to the Junior Lien Intercreditor Agreement; provided, further, that if such Indebtedness is incurred pursuant to clause (B)(z) above, such Indebtedness shall not mature or require any scheduled amortization or scheduled payments of principal or be subject to any mandatory redemption, repurchase, repayment or sinking fund obligation (other than (x) payments as part of an “applicable high yield discount obligation” catch up payment, (y) customary offers to repurchase in connection with any change of control, Disposition or Casualty Event and (z) customary acceleration rights after an event of default), in each case, prior to the date that is 91 days after the then-existing Latest Maturity Date applicable to Term Loans; provided, further, that if such Indebtedness is incurred pursuant to clauses (B)(y) or (B)(z) above, it shall be documented under separate facility documentation (this clause (b), the “Permitted Ratio Debt”);
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) Permitted Refinancing of Permitted Ratio Debt;
(it) Credit Agreement Refinancing Indebtedness;
(u) other unsecured or junior lien Indebtedness of the Parent Borrower or any of its Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan PartySubsidiaries, in an aggregate principal amount not to exceed (A) $600,000,000 that at any one the time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02of, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant after giving effect to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtednessthereof, the Weighted Average Life to Maturity of such Indebtedness shall would not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 25,000,000 and (y) 30.02.1% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period Total Assets at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 10,000,000 and (y) 25.00.8% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingTotal Assets;
(iw) Indebtedness (of Joint Ventures in an aggregate principal amount that at the form time of, and after giving effect to, the incurrence thereof, would not exceed the greater of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100$10,000,000 and 0.8% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) Total Assets at any Permitted Refinancing thereoftime outstanding;
(x) Indebtedness with respect arising from Permitted Intercompany Activities to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with the extent constituting an Investment permitted by Section 2.17 and any Permitted Refinancing thereof7.02; and
(zy) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yx) above. For purposes In respect of determining any Indebtedness directly or indirectly, created, incurred, assumed or suffered to exist in compliance with this Section 7.037.03 which ranks pari passu in right of payment and pari passu with respect to security with the Facilities; (i) if such Indebtedness is borrowed or issued by any Loan Party, it shall not be guaranteed by any Person that is not a Loan Party or secured by any assets other than the Collateral, (ii) such Indebtedness shall not have a shorter Weighted Average Life to Maturity than the remaining Weighted Average Life to Maturity of the Term Loans or a maturity date earlier than the then-existing Latest Maturity Date, (iii) such Indebtedness shall be subject to a First Lien Intercreditor Agreement and (iv) in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type case of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest is in the form of additional loans, the All-In Yield for such loans shall be subject to the “most favored nation” requirements set forth in Section 2.14(e)(iii), as applicable. Any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Section 7.03(q), 7.03(g), 7.03(u) or 7.03(v) shall be permitted to the extent such Indebtedness does not be deemed to be an incurrence exceed in the aggregate at any time outstanding, the greater of Indebtedness for purposes $30,000,000 and 2.5% of this Section 7.03Total Assets, in each case determined at the time of incurrence.
Appears in 1 contract
Indebtedness. Create(a) The Borrower will not, and will not permit any Restricted Subsidiary to, create, incur, assume or suffer permit to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its the Restricted Subsidiaries in respect of under the Loan Documents (including any Ratably Secured Existing NotesIndebtedness incurred pursuant to Section 2.20, 2.21, 2.24 and 2.25);
(ii) Surviving Indebtedness listed (A) outstanding on the Effective Date (other than the ABL Facility); provided that any such Indebtedness in excess of $10,000,000 individually shall only be permitted if set forth on Schedule 7.03(c6.01, and any Permitted Refinancing thereof and (B) that is intercompany Indebtedness among the Borrower and/or the Restricted Subsidiaries outstanding on the Effective Date and any Permitted Refinancing thereof (so long as any such Permitted Refinancing is intercompany Indebtedness);
(iii) any Permitted Refinancing of any of Guarantees by the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its the Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) such Guarantee is otherwise permitted by Section 6.04, (B) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Loan Document Obligations pursuant to the Collateral and Guaranty Agreement and (C) if the Indebtedness being guaranteed Guaranteed is subordinated to the Loan Document Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Loan Document Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(eiv) Indebtedness of the Parent Borrower or of any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary or the Borrower to the extent constituting an Investment permitted by Section 7.026.04; provided that all such Indebtedness of any Loan Party owed owing to any Person Restricted Subsidiary that is not a Loan Party shall be subject subordinated to the subordination Loan Document Obligations (to the extent any such Indebtedness is outstanding at any time after the date that is 30 days after the Effective Date or such later date as the Administrative Agent may reasonably agree) (but only to the extent permitted by applicable law and not giving rise to material adverse Tax consequences) on terms (A) at least as favorable to the Lenders as those set forth in Section 3.01 the form of intercompany note attached as Exhibit H or (B) otherwise reasonably satisfactory to the GuarantyAdministrative Agent;
(fA) (i) Attributable Indebtedness and other Indebtedness (including Capitalized LeasesFinance Lease Obligations) of the Borrower or any of the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (whether through the direct purchase of property or any Person owning such property); provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) 270 days after the applicable acquisition, construction, repair, replacement or improvement); provided, (ii) Attributable further, that, at the time of any such incurrence of Indebtedness arising out and after giving Pro Forma Effect thereto and the use of Permitted Sale Leasebacks in an the proceeds thereof, the aggregate principal amount of Indebtedness that is outstanding in reliance on this subclause (A) shall not to exceed at any one time outstanding the greater sum of (x) the greater of $100,000,000 122,500,000 and 50% of LTM Consolidated EBITDA plus (y) 6.0% of Consolidated EBITDA of an unlimited amount so long as the Parent Borrower Secured Leverage Ratio (calculated as if such purchase money indebtedness, finance leases and capital leases are secured by Collateral for the most recently ended Test Period these purposes) does not exceed 3.00:1.00, and (iiiB) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding subclause (A);
(vi) Indebtedness in respect of Swap Agreements (other than Swap Agreements entered into for speculative purposes);
(vii) (A) (1) Indebtedness of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary) after the Effective Date as a result of a Permitted Acquisition or other Investment (and any guarantee of such Indebtedness by a Subsidiary of such Person), (2) Indebtedness of any Person that is assumed by the Borrower or any Restricted Subsidiary in connection with an acquisition of assets by the Borrower or such Restricted Subsidiary in a Permitted Acquisition or other Investment and (3) any guarantee of Indebtedness described in the foregoing clauses (i1) and (ii2) by any Person that so becomes a Restricted Subsidiary, that is the survivor of a merger or consolidation with such Person or that is a Subsidiary of such Person; provided that such Indebtedness (or guarantee thereof) is not incurred in contemplation of such Permitted Acquisition or other Investment; and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the foregoing subclause (A); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to outstanding in reliance on this clause (iivii) of which the primary obligor or a guarantor is a Restricted Subsidiary that is not or does not become a Guarantor, together with the aggregate amount of Indebtedness outstanding in reliance on Sections 6.01(a)(xiv), (xix) under this Section 7.03(fand (xxvi) of which the primary obligor or a guarantor is a Restricted Subsidiary that is not or does not become a Guarantor, shall not exceed the greater of (x) $350,000,000 122,500,000 and (y) 20.050% of LTM Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodEBITDA;
(gviii) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancePermitted Receivables Financings;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(iix) Indebtedness representing deferred compensation to employees and other service providers of the Parent Borrower (or any direct or indirect parent of and the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jx) Indebtedness consisting of unsecured promissory notes issued by the Borrower or any Restricted Subsidiary to current or former officers, directors, partners, managers, consultants directors and employees, employees or their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) Borrower permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding6.08(a);
(kxi) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsadjustments (including “earn out” or similar obligations and mark to market adjustments with respect to the foregoing) incurred in connection with the Transactions or any Permitted Acquisition, any other Investment or any Disposition, in each case permitted under this Agreement;
(lxii) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions Transactions or any Permitted Acquisition or other Investment expressly permitted hereunder;
(mxiii) Cash Management Obligations Obligations, Cash Management Services and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case and Indebtedness arising from the honoring of a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds (including Indebtedness owed on a short term basis of no longer than 30 days to banks and other financial institutions incurred in the ordinary coursecourse of business of the Borrower and the Restricted Subsidiaries with such banks or financial institutions that arises in connection with ordinary banking arrangements to manage cash balances of the Borrower and the Restricted Subsidiaries);
(nxiv) Indebtedness of the Borrower and the Restricted Subsidiaries; provided that, at the time of the incurrence thereof and after giving Pro Forma Effect thereto, the aggregate principal amount of Indebtedness outstanding in reliance on this clause (xiv) shall not exceed (x) the greater of $122,500,000 and 50% of LTM Consolidated EBITDA (this clause (x), the “General Debt Basket”), minus (y) the General Debt Basket Reallocated Amount (if any); provided that the aggregate amount of Indebtedness outstanding in reliance on this clause (xiv) of which the primary obligor or a guarantor is a Restricted Subsidiary that is not or does not become a Guarantor, together with the aggregate amount of Indebtedness outstanding in reliance on Sections 6.01(a)(vii), (xix) and (xxvi) of which the primary obligor or a guarantor is a Restricted Subsidiary that is not or does not become a Guarantor, shall not exceed the greater of $122,500,000 and 50% of LTM Consolidated EBITDA;
(xv) Indebtedness consisting of (aA) the financing of insurance premiums or (bB) take or take-or-pay obligations contained in supply arrangements, in each case, case in the ordinary course of business;
(oxvi) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created created, or related to obligations or liabilities incurred, in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pxvii) obligations in respect of performance, bid, appeal and surety bonds and performance performance, bankers’ acceptance facilities and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qxviii) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower and the Restricted Subsidiaries consisting of guarantees of the obligations of any Person on which the Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 owns any Equity Interest; provided that at the time of any the incurrence pursuant to thereof and after giving Pro Forma Effect thereto, the aggregate principal amount of Indebtedness outstanding in reliance on this clause (Axviii) shall not exceed the greater of $61,500,000 and 25% LTM Consolidated EBITDA;
(when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause xix) (A) unsecured Indebtedness or Indebtedness secured solely by assets that are do not constitute Collateral, in each case, of the Borrower or any of the Restricted Subsidiaries; provided that, after giving effect to the incurrence of such Indebtedness (and any Permitted Acquisition or other permitted Investment consummated in reliance connection therewith) on Section 7.03(r)(iia Pro Forma Basis (and without netting any cash proceeds of incurrence of such Indebtedness), either (1) belowthe Interest Coverage Ratio is greater than or equal to the lesser of (x) plus the Interest Coverage Ratio in effect immediately prior to the incurrence of such Indebtedness and (By) unlimited additional unsecured 2.00 to 1.00 or junior lien Indebtedness, so long as either (2) the Total Leverage Ratio is equal to or less than the greater of (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as in effect immediately prior to the incurrence of the end of the most recent Test Period is not greater than 7.00:1.00 or such Indebtedness and (y) 5.00 to 1.00 and (B) any Permitted Refinancing of Indebtedness incurred pursuant to the Fixed Charge Coverage Ratio foregoing subclause (calculated on A); provided that the aggregate amount of Indebtedness outstanding under this clause (xix) of which the primary obligor or a Pro Forma Basis) for the end of the most recent Test Period guarantor is a Restricted Subsidiary that is not less than 2.00:1.00or does not become a Guarantor, together with the aggregate amount of Indebtedness outstanding under Sections 6.01(a)(vii), (xiv) and (xxvi) of which the primary obligor or a guarantor is a Restricted Subsidiary that is not or does not become a Guarantor, shall not exceed the greater of $122,500,000 and 50% of LTM Consolidated EBITDA; provided further thatprovided, in further, that the case maturity date of any such Indebtedness incurred under this clause (r), (1xix) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Term Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, and the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that the remaining Weighted Average Life to Maturity of the Term B Loans (without giving effect to any previous amortization payments or prepayments of the Term Loans); provided further that, for purposes of determining whether Permitted Convertible Indebtedness meets the foregoing requirements, neither any settlement upon conversion of such Permitted Convertible Indebtedness (Cwhether in cash, stock or other property) no Restricted Subsidiary is nor any required redemption or repurchase thereof upon a borrower “fundamental change” (as customarily defined for such Permitted Convertible Indebtedness) shall disqualify such Permitted Convertible Indebtedness from satisfying such requirements notwithstanding a possible occurrence prior to the then latest scheduled maturity date of the Term Loans;
(xx) Indebtedness supported by a letter of credit, bank guarantee or guarantor similar instrument permitted by this Section 6.01(a), in a principal amount not to exceed the face amount of such letter of credit, bank guarantee or such other instrument;
(xxi) Permitted Unsecured Refinancing Debt and any Permitted Refinancing thereof;
(xxii) Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt, and, in each case, any Permitted Refinancing thereof;
(A) Indebtedness of the Borrower or any Guarantor issued in lieu of Incremental Facilities (such Indebtedness incurred under this clause (xxiii), “Incremental Equivalent Debt”) consisting of secured or unsecured loans, bonds, notes or debentures; provided that (x) the aggregate principal amount of Incremental Equivalent Debt incurred pursuant to this clause (xxiii), together with the aggregate outstanding principal amount of Incremental Facilities at such time, shall not exceed the Incremental Cap at the time of incurrence of such Incremental Equivalent Debt and (y) such Indebtedness complies with the Required Additional Debt Terms (provided that, except as set forth in this subclause (y) or sub-clause (x) above, for the avoidance of doubt, the terms and conditions applicable to Incremental Facilities set forth in Section 2.20 shall not apply with respect to such Incremental Equivalent Debt) and (B) any Permitted Refinancing of Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed incurred pursuant to the Obligationsforegoing clause (A) (provided that, for purposes of this clause (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuancexxiii), (E) if such Indebtedness is in the form case of a term loan facility Incremental Equivalent Debt that is incurred in reliance on clause (II) of the Loan Parties definition of “Incremental Cap” and that is (1) secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered ranking on a junior priority basis to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Secured Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, in lieu of the First Lien Senior Leverage Ratio test applicable thereto, an unlimited amount of Incremental Equivalent Debt may be incurred under clause (II) of the definition of “Incremental Cap” so long as, after giving effect to the relevant incurrence of Incremental Equivalent Debt, the Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall does not exceed the greater of (x) $400,000,000 3.75:1.00 and (y) 25.0% the Secured Leverage Ratio in effect immediately prior to the incurrence of Consolidated EBITDA such Incremental Equivalent Debt, in each case, calculated on a Pro Forma Basis (and without netting any cash proceeds of such incurrence), or (2) unsecured, in lieu of the Parent Borrower for First Lien Leverage Ratio test applicable thereto, an unlimited amount of Incremental Equivalent Debt may be incurred under clause (II) of the most recently ended Test Period at definition of “Incremental Cap” so long as, after giving effect to the relevant incurrence of Incremental Equivalent Debt, either (a) the Total Leverage Ratio does not exceed the greater of (x) 5.00:1.00 and (y) the Total Leverage Ratio in effect immediately prior to giving effect to the incurrence of such Incremental Equivalent Debt, in each case, calculated on a Pro Forma Basis (and without netting any one time outstandingcash proceeds of such incurrence), or (b) the Interest Coverage Ratio is no less than the lesser of (x) 2.00:1.00 and (y) the Interest Coverage Ratio in effect immediately prior to the incurrence of such Incremental Equivalent Debt, in each case, calculated on a Pro Forma Basis (and without netting any cash proceeds of such incurrence));
(ixxiv) [reserved];
(xxv) Indebtedness of any Restricted Subsidiary that is not a Loan Party; provided that the aggregate principal amount of Indebtedness of which the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan Party outstanding in reliance on this clause (in xxv) shall not exceed, at the form time of senior securedincurrence thereof and after giving Pro Forma Effect thereto, senior unsecured, senior subordinated, the greater of $86,000,000 and 35% of LTM Consolidated EBITDA;
(xxvi) (A) Indebtedness of the Borrower or subordinated notes any Restricted Subsidiary incurred to finance a Permitted Acquisition or loansother Investment; provided that the aggregate principal amount of such Indebtedness at any time outstanding shall not exceed the greater of $86,000,000 and 35% LTM Consolidated EBITDA and (B) any Permitted Refinancing of Indebtedness incurred by a Borrower pursuant to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iiiforegoing clause (A); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.aggr
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of Holdings, the Parent Borrower and Borrowers or any of its their respective Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in respect of the Senior Secured Notes (Sixth Restatement Effective Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the Sixth Restatement Effective Date;
(c) (i) Indebtedness of Guarantees by Holdings, the Parent Borrower Borrowers and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of Holdings, the Parent Borrower Borrowers or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d7.03(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of Holdings, the Parent Borrower Borrowers or any Restricted Subsidiary owing to Holdings, the Parent Borrower Borrowers or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that (x) is not a Loan Party or (y) is a Caribbean Party, in each case, shall be subject to the subordination terms set forth in Section 3.01 of reasonably satisfactory to the GuarantyAdministrative Agent;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) 360 days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xSale-Leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange against interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries commodities pricing risks incurred in the ordinary course of businessbusiness and not for speculative purposes;
(jg) Indebtedness to current of Holdings, the Borrowers or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 Restricted Subsidiary assumed in an aggregate amount not to exceed $20,000,000 at connection with any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Dispositionprovided that (x) such Indebtedness (i) was not incurred in contemplation of such Permitted Acquisition, (ii) is secured only by the assets acquired in each case to the extent constituting indemnification obligations or obligations in respect of purchase price applicable Permitted Acquisition (including earn-outs) or other similar adjustments;any acquired Equity Interests), and
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (aiii) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness only obligors with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (tg) being referred shall be those Persons who were obligors of such Indebtedness prior to as “such Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 Acquisition, and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) both immediately prior and after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, effect thereto (A) after giving Pro Forma Effect to such Permitted Acquisition no Default shall exist or would result therefrom and such secured Indebtedness, (B) the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption aggregate principal amount of such Indebtedness and (B) if such all Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred resulting from any Permitted Refinancing thereof at any time outstanding pursuant to this clause (Bg) being referred to does not exceed (x) for all Loan Parties, the greater of $250,000,000 and 3.00% of Total Assets (determined as “Permitted Credit Facilities Acquisition Debt”of the date of incurrence) and (iiiy) for all Non-Loan Parties, the maximum greater of $200,000,000 and 2.25% of Total Assets (determined as of the date of incurrence) (provided that the aggregate principal amount of Indebtedness that may be incurred outstanding for all Non-Loan Parties pursuant to this clause (vg) and Section 7.03(rclause (h) by Non-Loan Parties below shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding$300,000,000);
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(bi) ABL Facility Indebtedness of the Borrowers in respect Loan Parties (A) under clause (i) of the Senior Secured Notes (and Guarantees thereof by the Guarantors) definition of ABL Facility Indebtedness in an aggregate principal amount not to exceed $2,250,000,000 the greater of (I) the Maximum ABL Facility Amount and (II) the Borrowing Base and (B) under clauses (ii) and (iii) of the definition of ABL Facility Indebtedness and (ii) any Permitted Refinancing thereof;
(c) (i) Indebtedness of outstanding on the Parent Borrower date hereof and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of thereof and (ii) intercompany Indebtedness outstanding on the foregoingdate hereof;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 5.02 of the GuarantyU.S. Security Agreement;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided and provided, further, that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) at any one time outstanding under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period15,000,000;
(g) Indebtedness in respect of Swap Contracts (i) entered into designed to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange against interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment commodities pricing risks incurred in the ordinary course of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancenot for speculative purposes;
(h) Guarantee Obligations Indebtedness assumed in connection with any Permitted Acquisition in an aggregate principal amount at any time outstanding not to exceed $15,000,000, provided that (x) such Indebtedness (i) was not incurred in contemplation of such Permitted Acquisition, (ii) is secured only by the assets acquired in the applicable Permitted Acquisition (including any acquired Equity Interests), (iii) the only obligors with respect toto any Indebtedness incurred pursuant to this clause (h) shall be those Persons who were obligors of such Indebtedness prior to such Permitted Acquisition, and (y) both immediately prior and after giving effect thereto no Default shall exist or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)result therefrom;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings Parent (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts incurred in the ordinary course;
(n) Indebtedness in an aggregate principal amount not to exceed $20,000,000 at any time outstanding;
(o) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ banker’s acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit[reserved];
(rs) [reserved];
(it) other [reserved];
(u) unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not Subsidiary; provided that both immediately prior and after giving Pro Forma Effect to exceed such incurrence (Ai) $1,000,000,000 at the time no Default or Event of any incurrence pursuant to this clause Default shall exist or result therefrom and (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (xii) the Total Net Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall does not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding3.5:1.00;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[reserved];
(iw) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof[reserved]; and
(zx) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yw) above. For purposes of determining compliance with any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt; provided that if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and such extension, replacement, refunding, refinancing, renewal or defeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, replacement, refunding, refinancing, renewal or defeasance, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being extended, replaced, refunded, refinanced, renewed or defeased. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (zx) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Term Loan Credit Agreement (SMART Technologies Inc.)
Indebtedness. CreateNeither the Borrower nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documents;
(b) (i) Indebtedness of outstanding on the Borrowers in Closing Date and, with respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) to any such Indebtedness in an aggregate principal amount not to exceed in excess of $2,250,000,000 5,000,000, listed on Schedule 7.03(b) and any Permitted Refinancing thereofthereof and (ii) Indebtedness owed to the Borrower or any Restricted Subsidiary outstanding on the Closing Date and any refinancing thereof with Indebtedness owed to the Borrower or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any Indebtedness advanced by any Person that is not a Loan Party to any Loan Party pursuant to this clause (b) shall be subordinated in right of payment to the Loans and (y) any Indebtedness advanced by any Loan Party to any Person that is not a Loan Party shall either (i) be made in the ordinary course of business or consistent with past practice or (ii) be evidenced by a note pledged as Collateral on a first priority basis for the benefit of the Obligations, which note shall be in form and substance reasonably satisfactory to the Administrative Agent (it being understood that an Intercompany Note shall be satisfactory to the Administrative Agent);
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary of the Borrower otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee (other than Guarantees by a Foreign Subsidiary of Indebtedness of another Foreign Subsidiary) of any Indebtedness constituting Junior Financing with a principal amount in excess of the Threshold Amount shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Credit Agreement (Legence Corp.)
Indebtedness. CreateNone of the Borrower or any Restricted Subsidiary will create, incur, assume or suffer permit to exist any IndebtednessIndebtedness or Disqualified Equity Interests, except:
(ai) Indebtedness of the Parent Borrower and any of its Subsidiaries created under the Loan Documents;
(bii) Indebtedness existing on the Restatement Effective Date and set forth on Schedule 6.01 and Refinancing Indebtedness in respect thereof;
(iii) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not Borrower to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower Subsidiary or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02Subsidiary; provided that all (A) such Indebtedness of shall not have been transferred to any Person other than the Borrower or any Restricted Subsidiary, (B) any such Indebtedness owing by the Borrower to any Restricted Subsidiary or by any Loan Party owed to any Person Restricted Subsidiary that is not a Loan Party shall be subject unsecured and subordinated in right of payment to the subordination terms set forth Loan Document Obligations in Section 3.01 accordance with the provisions of the GuarantyGlobal Intercompany Note and (C) any such Indebtedness owing by any Restricted Subsidiary that is not a Loan Party to any Loan Party shall be incurred in compliance with Section 6.04;
(fiv) Guarantees by the Borrower of Indebtedness of any Restricted Subsidiary and by any Restricted Subsidiary of Indebtedness of the Borrower or any other Restricted Subsidiary; provided that (iA) Attributable the Indebtedness so Guaranteed is permitted by this Section (other than clause (ii) or (vi)), (B) Guarantees by any Loan Party of such Indebtedness of any Restricted Subsidiary that is not a Subsidiary Loan Party shall be incurred in compliance with Section 6.04, (C) Guarantees permitted under this clause (iv) shall be subordinated to the Obligations of the applicable Restricted Subsidiary to the same extent and other on the same terms as the Indebtedness so Guaranteed is subordinated to the Obligations;
(including Capitalized Leasesv) financing Indebtedness of the Borrower or any Restricted Subsidiary (A) incurred to finance the acquisition, construction, repair, replacement construction or improvement of any fixed or capital assets (assets, including Capital Lease Obligations and Synthetic Lease Obligations, provided that such Indebtedness is incurred concurrently with prior to or within two hundred seventy (270) 270 days after such acquisition or the applicable acquisition, construction, repair, replacement completion of such construction or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate improvement and the principal amount of such Indebtedness does not exceed the cost of acquiring, constructing or improving such fixed or capital assets or (B) assumed in connection with the acquisition of any fixed or capital assets or secured by a Lien on such assets prior to exceed the acquisition thereof, and Refinancing Indebtedness in respect of any of the foregoing; provided that the aggregate outstanding principal amount of Indebtedness incurred in reliance on this clause (v) shall not at any one time outstanding of incurrence exceed the greater of (x) $100,000,000 and (y) 6.03.00% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Net Tangible Assets as of the last day of the fiscal quarter, if any, of the Borrower most recently ended for which financial statements shall have been delivered pursuant to Section 5.01(a) or 5.01(b);
(vi) Permitted Acquired Debt; provided that after giving effect to the acquisition of the obligor in respect thereof or the assumption by any Restricted Subsidiary of such Permitted Acquired Debt, (A) in the case of any Permitted Acquired Debt in respect of which the only Restricted Subsidiaries that are obligors are CFCs, the Borrower shall be in compliance on a Pro Forma Basis with the Leverage Ratio under Section 6.12 for the most recent Test Period is either prior to such time for which financial statements shall have been delivered pursuant to Section 5.01(a) or 5.01(b) (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately or, prior to the consummation delivery of any such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Partiesfinancial statements, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended recent Test Period at any one time outstanding;
(i) Indebtedness (contained in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower financial statements referred to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii3.04); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) the aggregate outstanding principal amount of Permitted Acquired Debt of all Permitted Acquired Debt Non-Guarantors (including any Subsidiary that will become a Permitted Acquired Debt Non-Guarantor in connection with such acquisition) shall not exceed $100,000,000, and (C) the combined total assets of all Permitted Acquired Debt Non-Guarantors shall be less than 5% of the consolidated total assets of the Borrower (excluding assets of, and investments in, CFCs) and the combined revenues of all Permitted Acquired Debt Non-Guarantors shall account for less than 5% of the consolidated revenues of the Borrower (excluding consolidated revenues attributable to CFCs), in each case as of the date end of or for the most recent period of four consecutive fiscal quarters of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor Borrower for which financial statements shall have previously been delivered pursuant to Section 5.01(a) or substantially concurrently guaranteed 5.01(b) (or, prior to the Obligationsdelivery of any such financial statements, as of and for the most recent such period contained in the financial statements referred to in Section 3.04) (D) the terms but with such consolidated total assets and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall revenues calculated by treating Unrestricted Subsidiaries as if they were not participate in mandatory prepayments on a greater than pro rata basis consolidated with the Term Loans Borrower and (E) the Parent Borrower has delivered to the Administrative Agent a certificate otherwise eliminating all accounts of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (AUnrestricted Subsidiaries), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. CreateNeither the Company nor any of the Restricted Subsidiaries shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under (i) the Loan Documents;
, (bii) Indebtedness of the Borrowers in respect of the Senior Secured Unsecured Notes (and Guarantees thereof by the Guarantors) Documents in an aggregate principal amount not to exceed $2,250,000,000 and 300,000,000 and, in the case of this clause (ii), any Permitted Refinancing thereof;
(c) (i) Indebtedness of outstanding on the Parent Borrower Closing Date and listed on Schedule 7.03(b) and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, Permitted Refinancing thereof and (ii) Surviving Indebtedness listed owed to the Company or any Restricted Subsidiary outstanding on Schedule 7.03(cthe Closing Date and any refinancing thereof with Indebtedness owed to the Company or any Restricted Subsidiary in a principal amount that does not exceed the principal amount (or accreted value, if applicable) of the intercompany Indebtedness so refinanced; provided that (x) any amount owed by a Restricted Subsidiary that is not a Loan Party to a Loan Party shall be evidenced by an Intercompany Note and (iiiy) any Permitted Refinancing all such Indebtedness of any of Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be unsecured and subordinated to the foregoingObligations pursuant to an Intercompany Note;
(dc) Guarantee Obligations of Guarantees by the Parent Borrower Company and its any Restricted Subsidiaries Subsidiary in respect of Indebtedness of the Parent Borrower Company or any Restricted Subsidiary of the Company otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided that, that (A) no Guarantee of any Senior Unsecured Notes or any Indebtedness constituting Junior Financing shall be permitted unless such guaranteeing party shall have also provided a Guarantee of the Obligations on the terms set forth herein and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of the Parent Borrower Company or any Restricted Subsidiary owing to the Parent Borrower Company or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person or Restricted Subsidiary that is not a Loan Party shall be subject evidenced by an Intercompany Note and any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party is subordinated in right of payment to the subordination Loans (for the avoidance of doubt, any such Indebtedness owing to a Restricted Subsidiary that is not a Loan Party shall be deemed to be expressly subordinated in right of payment to the Loans unless the terms set forth in Section 3.01 of the Guarantysuch Indebtedness expressly provide otherwise);
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing an acquisition, construction, repair, replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of a fixed or capital asset incurred by the Company or any Restricted Subsidiary prior to or within 365 days after the acquisition, construction, repair, replacement replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisitionasset in an aggregate amount not to exceed the greater of (a) $80,000,000 and (b) 6.0% of Total Assets, construction, repair, replacement or improvement)in each case determined at the time of incurrence (together with any Permitted Refinancings thereof) at any time outstanding, (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(m) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodforegoing;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against the Company’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Company or any Restricted Subsidiary assumed in connection with any Permitted Acquisition so long as such Indebtedness is not incurred in contemplation of such Permitted Acquisition, and any Permitted Refinancing thereof; provided that after giving pro forma effect to such Permitted Acquisition and the assumption of such Indebtedness, the aggregate amount of such Indebtedness does not exceed (x) $75,000,000 at any time outstanding plus (y) any additional amount of such Indebtedness so long (i) entered into if such Indebtedness is secured on a junior basis to hedge the Facilities, the Consolidated Total Net Leverage Ratio determined on a Pro Forma Basis is no greater than 2.00:1.00the Applicable Consolidated Total Net Leverage Ratio Level (or mitigate risks if such Indebtedness is assumed in connection with a Permitted Acquisition, no greater than the greater of (1) the Applicable Consolidated Total Net Leverage Ratio Level and (2) the Consolidated Total Net Leverage Ratio immediately prior to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those consummation of such Permitted Acquisition), and the Company and its Restricted Subsidiaries are in respect of shares of capital stock or other equity ownership interests compliance with the covenants set forth in Section 7.11, determined on a Pro Forma Basis as of the Parent Borrower or any Subsidiary), date of incurrence of such Indebtedness; (ii) entered into if such Indebtedness is secured on a pari passu basis with the Facilities, the Consolidated First Lien Net Leverage Ratio determined on a Pro Forma Basis is no greater than 1.00:1.00 the Applicable Consolidated First Lien Net Leverage Ratio Level (or if such Indebtedness is assumed in order connection with a Permitted Acquisition, no greater than the greater of (1) the Applicable Consolidated First Lien Net Leverage Ratio Level and (2) the Consolidated First Lien Net Leverage Ratio immediately prior to effectively capthe consummation of such Permitted Acquisition), collar or exchange interest rates (from fixed to floating ratesand the Company and its Restricted Subsidiaries are in compliance with the covenants set forth in Section 7.11, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment determined on a Pro Forma Basis as of the Parent Borrower date of incurrence of such Indebtedness; or any Subsidiary and (iii) entered into if such Indebtedness is unsecured, the Company and its Restricted Subsidiaries are in compliance with the covenants set forth in Section 7.11either (I) a Consolidated Interest Coverage Ratio no less than either (A) 2.00 to hedge commodities1.00 or (B) in the case of any such Indebtedness being assumed in connection with a Permitted Acquisition, currenciesthe Consolidated Interest Coverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition or (II) a Consolidated Total Net Leverage Ratio no greater than either (A) 4.00 to 1.00 or (B) in the case of any such Indebtedness being assumed in connection with a Permitted Acquisition, general economic conditionsthe Consolidated Total Net Leverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition, raw materials pricesdetermined, revenue streams in each case, on a Pro Forma Basis as of the date of incurrence of such Indebtedness; provided that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(q), 7.03(s) or business performance7.03(w), does not exceed in the aggregate at any time outstanding the greater of (A) $125,000,000 and (B) 4.25% of Total Assets;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower Company (or any direct or indirect parent thereof) or any of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes issued by the Company or any of its Restricted Subsidiaries to current or former officers, directors, partners, managers, consultants consultants, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Company or any direct or indirect parent thereof) of the Company permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(kj) Indebtedness incurred by the Parent Borrower Company or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent case, constituting indemnification obligations or obligations in respect of purchase price (including earn-outsearnouts) or other similar adjustments, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purposes of financing such acquisition; provided, that such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (j));
(lk) Indebtedness consisting of obligations of the Parent Borrower Company or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations obligations in respect of Treasury Services Agreements and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseCompany or any of its Restricted Subsidiaries, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed (x) the greater of (a) $200,000,000 and (b) 7.00% of Total Assets at any time outstanding plus (y) 100% of the cumulative amount of the net cash proceeds and Cash Equivalent proceeds from the sale of Equity Interests (other than Excluded Contributions, proceeds of Disqualified Equity Interests, Designated Equity Contributions or sales of Equity Interests to the Company or any of its Subsidiaries) of the Company or any direct or indirect parent of the Company after the Closing Date and on or prior to such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the Company that has not been applied to incur debt pursuant to this clause (m)(y), to make Restricted Payments pursuant to Section 7.06 (other than pursuant to Section 7.06(h)), to make Investments pursuant to clause 7.02(n), (v), (w), (y) or (z) or to make prepayments of subordinated indebtedness pursuant to Section 7.13 (other than 7.13(a)(iv));
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower Company or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower Company or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) so long as no Event of Default has occurred and is continuing or would result therefrom (or if the proceeds of such Indebtedness are being used to finance a Permitted Acquisition, no Event of Default under Sections 8.01(a) or (f) has occurred and is continuing), Indebtedness incurred on (x) a pari passu basis with the Facilities or (y) junior to the Facilities in an aggregate principal amount, when aggregated with the amount of Incremental Term Loans and Incremental Revolving Credit Commitments pursuant to Section 2.14(d)(v)(A), not to exceed $450,000,000; provided that such Indebtedness shall (A) in the case of clause (x) above, have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred, and in the case of clause (y) above, have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred, (B) in the case of clause (x) above, have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities and, in the case of clause (y) above, shall not be subject to scheduled amortization prior to maturity, (C) if such Indebtedness is incurred or guaranteed on a secured basis by a Loan Party subject to the First Lien Intercreditor Agreement and/or the Junior Lien Intercreditor Agreement, as applicable, (D) have terms and conditions (other than pricing, rate floors, discounts, fees, premiums and optional prepayment or redemption provisions) that in the good faith determination of the Company are not materially less favorable (when taken as a whole) to the Company than the terms and conditions of the Loan Documents (when taken as a whole) (provided that a certificate of the Company as to the satisfaction of the conditions described in this clause (D) delivered at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of documentation relating thereto, stating that the Company has determined in good faith that such terms and conditions satisfy the foregoing requirements of this clause (D), shall be conclusive unless the Administrative Agent notifies the Company within such five (5) Business Day period that it disagrees with such determination (including a description of the basis upon which it disagrees)) and (E) the Company and its Restricted Subsidiaries are in compliance with the covenants set forth in Section 7.11, determined on a Pro Forma Basis as of the date of incurrence of such Indebtedness; provided, further, that any such Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party, together with any Indebtedness incurred by a Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), 7.03(s) or 7.03(w), does not exceed in the aggregate at any time outstanding the greater of (1) $125,000,000 and (2) 4.25% of Total Assets;
(r) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rs) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms Debt and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Credit Agreement Refinancing thereofIndebtedness;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding[Reserved];
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Foreign Subsidiary which, when aggregated with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of all other Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall then outstanding, does not exceed the greater of (x) $400,000,000 and (y) 25.010% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstandingForeign Subsidiary Total Assets;
(iw) unsecured Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom areCompany or any Restricted Subsidiary, immediately after so long as the receipt thereof, applied solely to Company and its Restricted Subsidiaries are in compliance with the prepayment of Term Loans covenants set forth in accordance with Section 2.05(b)(iii); provided that 7.11either (I) a Consolidated Interest Coverage Ratio no less than either (A) such Indebtedness shall not mature earlier than the Maturity Date with respect 2.00 to the relevant Term Loans being refinanced, 1.00 or (B) in the case of any such Indebtedness incurred in connection with a Permitted Acquisition, the Consolidated Interest Coverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition or (II) a Consolidated Total Net Leverage Ratio no greater than either (A) 4.00 to 1.00 or (B) in the case of any such Indebtedness incurred in connection with a Permitted Acquisition, the Consolidated Total Net Leverage Ratio immediately prior to the incurrence of such Indebtedness and consummation of such Permitted Acquisition , determined, in each case, on a Pro Forma Basis as of the date of the incurrence of such Indebtedness; and without duplication, the Weighted Average Life to Maturity Permitted Refinancings of such Indebtedness; provided that any such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no incurred by a Restricted Subsidiary that is not a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent BorrowerLoan Party, together with all relevant financial information reasonably requested any Indebtedness incurred by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (Aa Restricted Subsidiary that is not a Loan Party pursuant to Sections 7.03(g), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.037.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) any Indebtedness incurred by any Loan Party pursuant to the ABL Facility in an aggregate principal amount at any time outstanding not to exceed $215,000,000 plus in the case of the Parent Borrower any Refinancing of such Indebtedness accrued and any of its Subsidiaries under the Loan Documentsunpaid interest and premium thereon plus other amounts paid, and fees and expenses incurred in connection with such Refinancing;
(b) (v) Indebtedness of the Borrowers Loan Parties under the Loan Documents, (w) any Refinancing Indebtedness, (x) Indebtedness evidenced by New Incremental Indebtedness, (y) Indebtedness evidenced by Permitted Debt Exchange Notes and (z) any Rollover Indebtedness and, in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and each case, any Permitted Refinancing thereof;
(c) (i) Indebtedness of outstanding or committed to be incurred on the Parent Borrower Closing Date and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) 7.03 and (iii) any Permitted Refinancing of any of the foregoingthereof;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Guarantees incurred in respect of any Indebtedness or other obligations of the Parent Borrower or any other Restricted Subsidiary otherwise that are permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur to be incurred under this Section 7.03)Agreement; provided that, that if the such Indebtedness being guaranteed or other obligation is subordinated to the Obligations, such any Guarantee Obligation thereof shall be subordinated to the Guarantee of the Obligations on terms at least as no less favorable to the Lenders as those contained in than the subordination terms of such IndebtednessIndebtedness or other obligation (as determined by the Borrower in good faith);
(e) Indebtedness of the Parent Borrower or (A) any Loan Party owing to any other Loan Party, (B) any Restricted Subsidiary owing that is not a Loan Party owed to the Parent Borrower or (1) any other Restricted Subsidiary that is not a Loan Party or (2) any Loan Party, and (C) any Loan Party to the extent constituting an Investment permitted by Section 7.02any Restricted Subsidiary which is not a Loan Party; provided that all such Indebtedness of any Loan Party owed under this clause (e)(C) must be expressly subordinated to any Person that is not a Loan Party shall be the Obligations on the terms of the Intercompany Subordination Agreement or subject to subordination terms substantially identical to the subordination terms set forth in Section 3.01 Exhibit K, in each case within 60 days of the Guarantyincurrence of such Indebtedness or such later date as the Administrative Agent shall reasonably agree, in each case, to the extent permitted by applicable law and not giving rise to materially adverse tax consequences;
(f) Capitalized Lease Obligations; provided that (i) Attributable such Indebtedness is not issued or incurred to acquire Equity Interests of any Person and other Indebtedness (ii) immediately after giving Pro Forma Effect to the issuance or incurrence of such Indebtedness, the Borrower’s Consolidated Total Secured Net Debt to Consolidated EBITDA Ratio shall be less than or equal to 2.75:1.00 and any Permitted Refinancing of such Capitalized Lease Obligations;
(g) (i) Capitalized Lease Obligations set forth on Schedule 7.03, (ii) purchase money obligations (including Capitalized Leasesobligations in respect of mortgage, industrial revenue bond, industrial development bond and similar financings) financing to finance the acquisitionpurchase, construction, repair, replacement repair or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270the limitations set forth in Section 7.01(i) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) in each case, any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)respect thereof; provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to at any time outstanding under clause (ii)) under of this Section 7.03(f7.03(g) does (together with the aggregate amount of all Sale Leaseback transactions outstanding pursuant to Section 7.07) shall not exceed the greater of (x) $350,000,000 15,000,000 and (y) 20.03.00% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodTotal Assets;
(gh) Indebtedness of Restricted Subsidiaries that are Foreign Subsidiaries not to exceed the greater of (i) $5,000,000 and (ii) 1.00% of Consolidated Total Assets, at any time outstanding;
(i) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which incurred in the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect ordinary course of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary business and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancenot for speculative purposes;
(hj) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)[Reserved];
(i) Indebtedness representing deferred compensation or stock-based compensation to employees directors, officers, employees, consultants or independent contractors of the Parent Borrower and the Restricted Subsidiaries and (ii) Indebtedness consisting of obligations of the Borrower or the Restricted Subsidiaries under deferred compensation to their directors, officers, employees, consultants or independent contractors or other similar arrangements incurred by such Persons in connection with the Transactions and Permitted Acquisitions or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of businessother Investment expressly permitted under Section 7.02;
(jl) Indebtedness consisting of promissory notes issued by the Borrower or any Restricted Subsidiary to current or former officers, directors, partners, managers, consultants directors and employees, consultants, independent contractors, their respective estates, heirs, family members, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (the Borrower or any direct or indirect parent thereof) Parent Holding Company permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(km) Indebtedness in respect of indemnification, purchase price adjustments or other similar obligations incurred by the Parent Borrower or any of its Restricted Subsidiaries Subsidiary in a Permitted Acquisition, any other Investment expressly permitted hereunder Disposition or any DispositionAsset Swap Transaction under agreements which provide for indemnification, in each case to the extent constituting indemnification obligations or obligations in respect adjustment of the purchase price (including earn-outs) or other for similar adjustments;
(ln) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation consideration (e.g., earn-outs, indemnifications, incentive non-competes and other contingent obligations) or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions Transaction, or any Permitted Acquisition, Asset Swap Transaction or other Investment expressly permitted hereunderunder Section 7.02;
(mo) Indebtedness of a Person or Indebtedness attaching to assets of a Person that, in either case, becomes a Restricted Subsidiary (or is merged or consolidated with or into the Borrower or a Restricted Subsidiary) or Indebtedness attaching to assets that are acquired by the Borrower or any Restricted Subsidiary (including any Indebtedness assumed by the Borrower or any Restricted Subsidiary in connection with any acquisition of any assets or Person), in each case after the Closing Date as the result of a Permitted Acquisition, Asset Swap Transaction or other Investment permitted by Section 7.02; provided that (i) such Indebtedness is not incurred in contemplation of such acquisition and (ii) on the date of determination, either (x) the Borrower’s Consolidated Total Net Debt to Consolidated EBITDA Ratio shall be less than or equal to 3.25:1.00 after giving Pro Forma Effect to the assumption of such Indebtedness and the related Specified Transactions, or (y) the Consolidated Total Net Debt to Consolidated EBITDA Ratio of the Borrower after giving Pro Forma Effect to such assumption of Indebtedness and the related Specified Transactions is less than or equal to the Consolidated Total Net Debt to Consolidated EBITDA Ratio of the Borrower immediately prior to such assumption of Indebtedness and the related Specified Transactions (it being understood, that in each case, Pro Forma Effect shall be given to the entire committed amount of any such Indebtedness, and such committed amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this clause (ii)), and any Permitted Refinancing of such Indebtedness;
(i) Indebtedness arising under Cash Management Obligations Agreements incurred in the ordinary course of business and other (ii) Indebtedness in respect of netting services, overdraft protections, credit card programs, automatic clearinghouse arrangements, overdraft protections arrangements and similar arrangements in each case incurred in connection with deposit accounts and Indebtedness arising from the ordinary course;
(n) Indebtedness consisting honoring of (a) the financing a bank or other financial institution of insurance premiums a check, draft or (b) take or pay obligations contained in supply arrangements, in each case, similar instrument drawn against insufficient funds in the ordinary course of business;
(oq) Indebtedness incurred by in an aggregate principal amount not to exceed the Parent Borrower or greater of (i) $25,000,000 and (ii) 5.00% of Consolidated Total Assets, at any of its Restricted Subsidiaries time outstanding;
(r) Indebtedness in respect of letters of creditany bankers’ acceptance, bank guarantees, bankers’ acceptancesletter of credit, warehouse receipts receipt or similar instruments issued or created facilities entered into in the ordinary course of business, business (including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims);
(ps) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any Restricted Subsidiary;
(t) Indebtedness consisting of its Restricted Subsidiaries (a) the financing of insurance premiums or (b) take-or-pay obligations contained in respect of letters of credit, bank guarantees or similar instruments related theretosupply arrangements, in each case case, in the ordinary course of business or consistent with past practicebusiness;
(qu) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect cash that is contributed to the common equity of Indebtedness originally incurred pursuant to this clause the Borrower (Aor any Parent Holding Company) after the Closing Date (other than by the Borrower or any Restricted Subsidiary); provided that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (xi) the Total Leverage Ratio (calculated on a Pro Forma Basis) as cash so contributed to any Parent Holding Company is promptly further contributed to the common equity of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r)Borrower, (1ii) such Indebtedness shall not mature prior is incurred within 180 days after such cash contribution to the date that Borrower is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, made and (2iii) such Indebtedness shall not have mandatory prepayment, redemption is designated as “Contribution Indebtedness” in a certificate from a Responsible Officer of the Borrower on the date incurred;
(v) Indebtedness incurred by the Borrower or offer to purchase events more onerous than those applicable to any Restricted Subsidiary constituting Permitted Additional Debt and any Permitted Refinancing in respect thereof; provided that the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to then outstanding in reliance on this clause (rv) in respect of which the primary obligor or a guarantor is a Restricted Subsidiary that is not a Loan Party shall not exceed the greater of (i) $10,000,000 and (ii) 2.00% of Consolidated Total Assets;
(w) Indebtedness incurred by a Permitted Receivables Financing Subsidiary in a Permitted Receivables Financing that is not recourse to the Borrower or any other Restricted Subsidiary (other than pursuant to Standard Securitization Undertakings); provided that the aggregate principal amount of Indebtedness at any time outstanding under this Section 7.03(v7.03(w) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 25,000,000 and (y) 25.05.00% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereofAssets;
(x) Indebtedness with respect to any Permitted Receivables Financingsupported by a letter of credit, in a principal amount not in excess of the stated amount of such letter of credit;
(y) Indebtedness of the Borrower or any Restricted Subsidiary as an account party in respect of trade letters of credit issued in the ordinary course of business;
(z) Guarantees incurred in the ordinary course of business by the Borrower or any of its Restricted Subsidiaries and not in respect of Indebtedness for borrowed money;
(aa) (i) unsecured Indebtedness in respect of obligations of the Borrower or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms in the ordinary course of business and not in connection with the borrowing of money and (ii) unsecured Indebtedness in respect of intercompany obligations of the Borrower or any Restricted Subsidiary in respect of accounts payable incurred in connection with goods sold or services rendered in the ordinary course of business and not in connection with the borrowing of money;
(bb) Indebtedness incurred in connection with any Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 Sale Leaseback and any Permitted Refinancing in respect thereof;
(cc) Permitted Disposition Transaction Indebtedness;
(dd) Indebtedness incurred pursuant to or in connection with the Transaction Documents;
(ee) any Indebtedness incurred by any Loan Party pursuant to the Letter of Credit Facility in an aggregate principal amount at any time outstanding not to exceed $50,000,000 plus in the case of any Refinancing of such Indebtedness accrued and unpaid interest and premium thereon plus other amounts paid, and fees and expenses incurred in connection with such Refinancing; and
(zff) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any IndebtednessIndebtedness or issue any Disqualified Equity Interest, exceptother than:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) (i) Indebtedness of existing on the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantorsdate hereof set forth on Schedule 9.3(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the date hereof; provided that all such Indebtedness of any Loan Party owed to any Non-Loan Party shall be subject to the Intercompany Subordination Agreement;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d9.3(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.039.3); provided that, that (A) no Guarantee by any Restricted Subsidiary of any Junior Financing shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations Guaranty on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (ii) any Guaranty by a Loan Party of Indebtedness of a Restricted Subsidiary that would have been permitted as an Investment by such Loan Party in such Restricted Subsidiary under Section 9.2(c);
(ed) Indebtedness of the Parent Borrower or any of the Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary (or issued or transferred to any direct or indirect parent of a Loan Party which is substantially contemporaneously transferred to a Loan Party or any Restricted Subsidiary of a Loan Party) to the extent constituting an Investment permitted by Section 7.029.2; provided that (i) all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth Intercompany Subordination Agreement and (ii) in Section 3.01 the event of any such Indebtedness in respect of the Guarantysale, transfer or assignment of Current Asset Collateral, such Indebtedness shall be duly noted on the books and records of the Loan Parties as being owing in respect of Current Asset Collateral;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) of the Borrower and the Restricted Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), improvement and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks Sale-Leasebacks, and, in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) each case, any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii)thereof; provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness at any one time outstanding incurred pursuant to this clause (ii)e) under this Section 7.03(f) does shall not exceed the greater of (x) $350,000,000 25,000,000 and (y) 20.010% of Consolidated EBITDA Adjusted EBITDA, in each case determined at the time of the Parent Borrower for the most recently ended Test Periodincurrence;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against Holdings’, the Borrower’s or any Restricted Subsidiary’s exposure to interest rates, foreign exchange rates or commodities pricing risks incurred in the Ordinary Course of Business and not for speculative purposes and Guarantees thereof;
(g) Indebtedness of the Borrower or any Restricted Subsidiary assumed (including Acquired Indebtedness) in connection with any Permitted Acquisition and any Permitted Refinancing of any such Indebtedness; provided that after giving Pro Forma Effect to such Permitted Acquisition and the assumption of such Indebtedness assumed pursuant to this clause (g), either:
(i) entered into the Consolidated Cash Interest Coverage Ratio is at least 2.00:1.00, or
(ii) the Consolidated Cash Interest Coverage Ratio is equal to hedge or mitigate risks greater than immediately prior to which such Permitted Acquisition, or
(iii) the Parent Borrower Total Net Leverage Ratio is no greater than 4.00:1.00, or
(iv) the Total Net Leverage Ratio is equal to or any Subsidiary has actual or anticipated exposure less than the Total Net Leverage Ratio as calculated immediately prior to such Permitted Acquisition; provided that in no event shall the aggregate amount of Indebtedness incurred by Non-Loan Parties under this clause (other than those in respect g), together with all Indebtedness of shares of capital stock or other equity ownership interests of the Parent Borrower or any SubsidiaryNon-Loan Parties incurred under clauses (n), (iit) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iiiy) entered into to hedge commoditiesof this Section 9.3, currencies, general economic conditions, raw materials prices, revenue streams or business performanceexceed at any time outstanding the greater of $25,000,000 and 10% of Adjusted EBITDA;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)[reserved];
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or and any direct or indirect parent of the Parent Borrowerthereof) and its Restricted Subsidiaries incurred in the ordinary course Ordinary Course of businessBusiness;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests or other equity based awards of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding9.6;
(k) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its and the Restricted Subsidiaries under deferred compensation or other similar arrangements with employees incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections protections, employee credit card programs and other cash management and similar arrangements in each case incurred in the ordinary courseOrdinary Course of Business and any Guarantees thereof;
(n) Indebtedness of the Borrower and the Restricted Subsidiaries in an aggregate principal amount at any time outstanding not to exceed the greater of $60,000,000 and 25% of Adjusted EBITDA, in each case determined at the time of incurrence (provided that in no event shall the aggregate amount of Indebtedness incurred by Non-Loan Parties under this clause (n), together with all Indebtedness of Non-Loan Parties incurred under clauses (g), (t) and (y) of this Section 9.3, exceed at any time outstanding the greater of $25,000,000 and 10% of Adjusted EBITDA);
(o) Indebtedness consisting of (ai) the financing of insurance premiums or (bii) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course Ordinary Course of businessBusiness;
(op) Indebtedness incurred by the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course Ordinary Course of business, including Business in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course Ordinary Course of business Business or consistent with past practice;
(qr) (i) (x) Indebtedness supported by a Letter of Credit under the Term Facility, Incremental Equivalent Debt and Refinancing Equivalent Debt, in a an aggregate principal amount not to exceed the face an amount of such Letter of Credit;
at any time outstanding equal to (r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A1) $1,000,000,000 770,000,000 plus (2) the Term Facility Incremental Usage Amount at such time and (y) Indebtedness incurred under the time Term Facility Credit Agreement or Incremental Equivalent Debt to the extent (1) if such Indebtedness is secured, the Secured Net Leverage Ratio on a Pro Forma Basis after giving effect to such incurrence and the use of any proceeds thereof does not exceed 4.00:1.00 and (2) if such Indebtedness is unsecured, the Total Net Leverage Ratio on a Pro Forma Basis after giving effect to such incurrence pursuant to this clause and the use of proceeds thereof does not exceed 4.00:1.00 and (Az) (when aggregated with the amount of Permitted Refinancings Refinancing Equivalent Debt in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding hereof and (ii) the amount of obligations in respect of any Secured Hedge Agreement and any Secured Cash Management Agreement (in each case, as defined in the Term Facility Credit Agreement) at any time outstanding and not incurred in violation of Section 9.3(f) and, in respect of clauses (i) and (ii), any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria[reserved];
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) Ratio Debt and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate amount not to exceed $50,000,000 at any time outstanding incurred by a Securitization Subsidiary in a Qualified Securitization Financing that is not recourse (except for Standard Securitization Undertakings) to the Borrower or any of the Restricted Subsidiaries;
(v) Indebtedness in respect of letters of credit issued for the account of any of the Subsidiaries of Holdings to finance the purchase of Inventory so long as (x) such Indebtedness is unsecured and (y) the aggregate principal amount of such Indebtedness does not exceed the greater of $25,000,000 and 10% of Adjusted EBITDA at any time;
(w) [reserved];
(x) Indebtedness of the Borrower or any Restricted Subsidiary (and any Permitted Refinancing thereof) in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA amount of the Parent net cash proceeds received by the Borrower for since the most recently ended Test Period at Effective Date from the issuance or sale of Equity Interests of the Borrower or cash contributed to the capital of the Borrower (in each case, other than any one time outstanding;
(vCure Amount or proceeds of Disqualified Equity Interests or sales of Equity Interests to the Borrower or any of its Subsidiaries) to the extent such net cash proceeds have not been applied pursuant to such clauses to make Restricted Payments pursuant to Section 9.6 or to prepay, redeem, purchase, defease or satisfy Indebtedness incurred pursuant to finance or assumed in connection with a Permitted AcquisitionSection 9.12, provided that so long as (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured incurred within one year following the receipt by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation Borrower of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) net cash proceeds and (ii) any Permitted Refinancing thereof;
(x) such Indebtedness with respect to any Permitted Receivables Financingis designated as “Contribution Indebtedness” on the date incurred;
(y) Indebtedness of Non-Loan Parties in respect an aggregate principal amount not to exceed at any time outstanding the greater of Permitted Debt Exchange Notes $20,000,000 and 7.5% of Adjusted EBITDA (provided that in no event shall the aggregate amount of Indebtedness incurred pursuant to by Non-Loan Parties under this clause (y), together with all Indebtedness of Non-Loan Parties incurred under clauses (g), (n) and (t) of this Section 9.3, exceed at any time outstanding the greater of $25,000,000 and 10% of Adjusted EBITDA), in each case determined at the date of incurrence or issuance;
(z) without duplication of, or aggregation with, any Indebtedness incurred under any other clause of this Section 9.3, the Borrower and its Restricted Subsidiaries may incur non-amortizing unsecured Indebtedness having a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofmaturity date that is later than 91-days after the Scheduled Termination Date as long as the Payment Conditions are satisfied after giving effect thereto; and
(zaa) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yz) above. For purposes of determining compliance with this Section 7.03any Dollar-denominated restriction on the incurrence of Indebtedness, the Dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more defeased, plus the aggregate amount of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been fees, underwriting discounts, premiums (including tender premiums) and other costs and expenses (including OID) incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03connection with such refinancing. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.039.3. The principal amount of any non-interest bearing Indebtedness or other discount security constituting Indebtedness at any date shall be the principal amount thereof that would be shown on a balance sheet of the Borrower dated such date prepared in accordance with GAAP. Notwithstanding anything to the contrary contained in this Agreement, Indebtedness incurred pursuant to the Term Facility (and any Permitted Refinancing thereof) may only be incurred pursuant to Section 9.3(r).
Appears in 1 contract
Indebtedness. CreateNo Credit Party shall, and no Credit Party shall suffer or permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries under the Loan Documents (including pursuant to any amendment in respect of connection with an Incremental Facility, any Ratably Secured Existing NotesExtension or Extension Offer, any Permitted Repricing Amendment or any other amendment entered into from time to time in accordance with the terms hereof);
(iib) Surviving Credit Agreement Refinancing Indebtedness;
(c) Indebtedness listed on Schedule 7.03(c5.3(c) and (iii) any Permitted Refinancing of any of the foregoing;thereof; US-DOCS\99983253.20
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d5.3(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.035.3); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any of its Restricted Subsidiary Subsidiaries owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.025.2; provided that all such Indebtedness of any Loan Credit Party owed to any Person that is not a Loan Credit Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyreasonably acceptable to Agent;
(f) (i) Attributable Indebtedness Capital Lease Obligations and other Indebtedness (including Capitalized Capital Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets; provided that such Indebtedness is incurred concurrently with or within two one hundred seventy and eighty (270180) days after the applicable acquisition, construction, repair, replacement or improvement), and (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses clause (i) and (ii); and provided further that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)Capital Lease Obligations) under this Section 7.03(f5.3(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period15,000,000 at any time outstanding;
(g) Indebtedness in respect of Swap Rate Contracts (i) entered into designed to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange against interest rates (from fixed to floating rates, from one floating rate to another floating rate foreign exchange rates or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancecommodities pricing risks incurred not for speculative purposes;
(h) Guarantee Obligations Indebtedness assumed in connection with respect to, any Permitted Acquisition or Investment permitted under Section 5.2; provided that (i) such Indebtedness was not incurred in contemplation of such Permitted Acquisition or Investment and (ii) the assumption of, aggregate amount of such assumed Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y)does not exceed $25,000,000 at any time outstanding;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course Ordinary Course of businessBusiness or approved by the board of directors or managers or sole member, as applicable, of the Borrower in their reasonable business judgment;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests Stock or Stock Equivalents of Holdings (or any direct or indirect parent thereof) the Borrower permitted by Section 7.06 5.6 in an aggregate principal amount not to exceed $20,000,000 5,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting (i) indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsadjustments or (ii) earn-out obligations, in the case of clause (ii), not in excess of an aggregate principal amount of $25,000,000 at any time outstanding; provided that, in each case, all such Indebtedness shall be unsecured and payable only to the extent permitted by Section 5.8(b);
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;; US-DOCS\99983253.20
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case in connection with deposit accounts incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course Ordinary Course of businessBusiness;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course Ordinary Course of businessBusiness, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course Ordinary Course of business or consistent with past practiceBusiness;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Subordinated Indebtedness of the Parent Borrower or any Restricted Subsidiary (and guarantees thereof by the Guarantors) in respect of the Subordinated Notes in an initial aggregate principal amount not to exceed (A) $1,000,000,000 at 110,000,000, minus (B) the time sum of any incurrence pursuant to this clause (A) (when aggregated with the amount all permitted principal payments of Permitted Refinancings Subordinated Indebtedness in respect of Indebtedness originally incurred pursuant to this clause the Subordinated Notes (Aincluding voluntary and mandatory prepayments, but specifically excluding prepayments occurring in connection with Permitted Refinancings) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Credit Party, and guarantees thereof by a Non-Loan Credit Party, in an aggregate principal amount not to exceed (A) $600,000,000 10,000,000 at any one time outstanding plus outstanding;
(Bt) additional Incremental Equivalent Indebtedness (and Guarantees thereof by the Guarantors) to the extent permitted by and incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; in compliance with the applicable provisions of Section 1.1(e), provided that (1) if such Incremental Equivalent Indebtedness is secured, it shall be secured solely by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness Collateral pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A5.1(y), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 20,000,000 at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (x);
(w) any Indebtedness constituting an Investment permitted under Section 5.2;
(x) obligations in respect of Disqualified Stock in an amount not to exceed $3,000,000 at any time outstanding which is subordinated to the Obligations as to right and time of payment and as to other rights and remedies thereunder and having such other terms as are, in each case, reasonably satisfactory to Agent; and US-DOCS\99983253.20
(y) aboveIndebtedness in connection with a judgment not constituting an Event of Default under Section 7.1(h). For purposes of determining compliance with this Section 7.03any restriction on the incurrence of Indebtedness, the principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the event that an item case of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) aboveterm debt, the Parent Borrower shallor first committed, in its sole discretionthe case of revolving credit debt; provided that if such Indebtedness is incurred to extend, classify replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and reclassify such extension, replacement, refunding, refinancing, renewal or later dividedefeasance would cause the applicable restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, classify replacement, refunding, refinancing, renewal or reclassify defeasance, such item restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness (or any portion thereof) and will only be required to include does not exceed the principal amount and type of such Indebtedness in one being extended, replaced, refunded, refinanced, renewed or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03defeased. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.035.3.
Appears in 1 contract
Sources: Credit Agreement (R1 RCM Inc.)
Indebtedness. CreateNo Credit Party shall, nor shall it permit any Subsidiary to, contract, create, incur, assume or suffer to exist any Indebtedness, including, without limitation, any guaranty with respect to the Indebtedness of any Person, except:
(a) Indebtedness the Obligations, including, without limitation, Rate Management Obligations and Banking Services Obligations, of the Parent Borrower Credit Parties and any of its their Subsidiaries under owing to the Loan DocumentsAgent and the Lenders (and their Affiliates);
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.11 and any Permitted Refinancing Indebtedness with respect thereto;
(c) purchase money Indebtedness and Capitalized Lease Obligations of the Borrowers in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) their Subsidiaries in an aggregate principal amount not to exceed $2,250,000,000 2,000,000 in the aggregate at any one time outstanding and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in with respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoingthereto;
(d) Guarantee Indebtedness of any Borrower to any Subsidiary that is a Borrower and of any Subsidiary that is a Borrower to any Borrower, provided that any such Indebtedness shall be unsecured and subordinated to the Obligations pursuant to Section 10.22 hereof;
(e) Contingent Obligations of any Credit Party of Indebtedness of any other Credit Party, provided that (i) any Indebtedness so guaranteed is permitted by this Section 6.11, and (ii) Contingent Obligations permitted under this clause (e) shall be subordinated to the Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of applicable Subsidiary on the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if same terms as the Indebtedness being so guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period[Reserved];
(g) to the extent incurred in connection with, and actually used to consummate, a Permitted Acquisition, unsecured Indebtedness (including seller debt and earnouts) subordinated in respect right of Swap Contracts (i) entered into payment and having payment restrictions acceptable to hedge or mitigate risks Agent, pursuant to which documentation reasonably satisfactory to the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of Agent, all at the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performancetime it is incurred;
(h) Guarantee Obligations with respect to, or the assumption of, unsecured Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower Borrowers and its Restricted Subsidiaries, in each case to the extent their Subsidiaries not otherwise permitted by this Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred 500,000 in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriawith respect thereto;
(i) Indebtedness contingent obligations arising from agreements of any Credit Party for customary indemnification obligations in favor of sellers and any adjustment of purchase price or acquisition price or similar obligations (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loansexcluding earn-outs) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofAcquisitions; and
(zj) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03Floorplan Repurchase Obligations.
Appears in 1 contract
Sources: Credit and Guaranty Agreement (McBc Holdings, Inc.)
Indebtedness. CreateThe Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, create, incur, assume or suffer otherwise become or remain liable with respect to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and Secured Obligations (including any of its Subsidiaries under the Loan DocumentsAdditional Term Loans);
(b) Indebtedness of the Borrowers Borrower to Holdings and/or any Restricted Subsidiary and/or of any Restricted Subsidiary to Holdings, the Borrower and/or any other Restricted Subsidiary; provided that (i) in respect the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party owing to the Borrower or any Restricted Subsidiary that is a Loan Party, such Indebtedness shall be permitted as an Investment under Section 6.05(b)(iii) and (ii) any Indebtedness of the Senior Secured Notes (and Guarantees thereof by Borrower or any Restricted Subsidiary that is a Loan Party to any Restricted Subsidiary that is not a Loan Party must be expressly subordinated to the Guarantors) in an aggregate principal amount not Obligations of such Loan Party on terms that are reasonably acceptable to exceed $2,250,000,000 and any Permitted Refinancing thereofthe Administrative Agent;
(c) the Secured Obligations (ias defined in the Pari Passu Credit Agreement in existence on the Closing Date) Indebtedness and any Banking Services Obligations and any Secured Heding Obligations permitted to be incurred under the Pari Passu Credit Agreement as of the Parent Closing Date; provided that, this clause (c) shall not permit the Borrower and or any of its Restricted Subsidiaries in respect of Subsidiairy to incure any Ratably Secured Existing Notesadditional Indebtedness that is secured by the Collateral on a pari passu basis with the Credit Facilities other than (x) Banking Services Obligations, (iiy) Surviving Indebtedness listed on Schedule 7.03(c) Secured Heding Obligations and (iiiz) any Permitted Refinancing of any drawings under the Revolving Facility pursuant to commitments in effect on the Closing Date, notwithstanding that such incurrence would be permitted under the terms of the foregoingPari Passu Credit Agreement in existence on the Closing Date;
(d) Guarantee Obligations unsecured Indebtedness of the Parent Borrower and/or any Restricted Subsidiary (i) arising from any indemnification, adjustment of purchase price or similar obligations (including earn-out, holdback and its Restricted Subsidiaries similar deferred purchase price obligations) incurred in connection with any Disposition permitted hereunder or consummated prior to the Closing Date, any acquisition or similar Investment permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock and (ii) in respect of Indebtedness guaranties, letters of credit, bank guaranties, bankers’ acceptances, surety bonds, performance bonds or similar instruments to support any of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtednessforegoing obligations;
(e) Indebtedness of the Parent Borrower or and/or any Restricted Subsidiary owing (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in the Parent Borrower ordinary course of business and (ii) in respect of guaranties, letters of credit, bank guaranties, bankers’ acceptances, surety bonds, performance bonds or similar instruments to support any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guarantyforegoing obligations;
(f) Indebtedness of the Borrower and/or any Restricted Subsidiary (i) Attributable Indebtedness in respect of any Banking Services and/or otherwise in connection with Cash management and other Indebtedness deposit accounts and (including Capitalized Leasesii) financing in respect of incentive, supplier finance or similar programs;
(i) Guarantees by the acquisitionBorrower and/or any Restricted Subsidiary of the obligations of suppliers, constructioncustomers, repair, replacement licensees or improvement sublicensees in the ordinary course of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement)business, (ii) Attributable Indebtedness arising out incurred in the ordinary course of Permitted Sale Leasebacks business in an aggregate principal amount not to exceed at any one time outstanding the greater respect of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA obligations of the Parent Borrower for and/or any Restricted Subsidiary to pay the most recently ended Test Period deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(g) Indebtedness in respect of Swap Contracts (i) guaranties, letters of credit, bank guaranties, bankers’ acceptances, surety bonds, performance bonds or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Restricted Subsidiary of Indebtedness or other obligations of the Borrower, any Restricted Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 or other obligations not prohibited by this Agreement; provided, that in the case of any Guarantee by the Borrower or any Restricted Subsidiary that is a Loan Party of the obligations of any non-Loan Party the related Investment is permitted under Section 6.05;
(i) Indebtedness of the Borrower and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the Closing Date, except in the case of Indebtedness having an aggregate principal amount not in excess of $2,500,000 and described on Schedule 6.01;
(j) Indebtedness to current or former officersof Restricted Subsidiaries that are not Loan Parties; provided, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance that the purchase or redemption aggregate outstanding principal amount of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount such Indebtedness shall not to exceed $20,000,000 at any one time outstandingthe Shared Non-Loan Party Debt Cap;
(k) Indebtedness incurred by of the Parent Borrower or and/or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness Subsidiary consisting of obligations of the Parent Borrower owing under incentive, supply, license, sublicense or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, agreements entered into in the ordinary course of business;
(ol) Indebtedness incurred by of the Parent Borrower and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements in the ordinary course of business and/or (iii) obligations to reacquire assets or any of its Restricted Subsidiaries inventory in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created connection with customer financing arrangements in the ordinary course of business, including in respect ;
(m) Indebtedness of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness the Borrower and/or any Restricted Subsidiary (i) with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations Capital Leases in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(q) Indebtedness supported by a Letter of Credit in a an aggregate outstanding principal amount not to exceed exceed, together with the face aggregate outstanding principal amount of such Letter Indebtedness incurred pursuant to clause (ii) below, $15,000,000 and (ii) incurred to finance the acquisition, construction, improvement, repair or replacement of Creditany assets in an aggregate outstanding principal amount not to exceed, together with the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (i) above, $15,000,000, in each case, incurred within 270 days after the applicable acquisition, completion of construction, improvement, repair or replacement of the relevant assets;
(rn) (i) other unsecured so long as no Event of Default exists at the time such Person becomes a Restricted Subsidiary or junior lien would result therefrom, Indebtedness of any Person that becomes a Restricted Subsidiary (or is merged, consolidated or amalgamated with or into the Parent Borrower or any Restricted Subsidiary) or Indebtedness assumed by the Borrower and/or any Restricted Subsidiary in connection with an acquisition or similar Investment permitted hereunder, in each case, after the Closing Date in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 10,000,000 at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, ; provided that (i) such Indebtedness (A) existed at the time such Person became a Restricted Subsidiary (or is so merged, consolidated or amalgamated) or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated effect thereto on a Pro Forma Basis) as of Basis (including any such merger, consolidation, amalgamation, acquisition or Investment), the most recent Test Period Borrower is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu in compliance with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Financial Covenant as of the last day of the most recently ended Test Period Period;
(o) unsecured Indebtedness of the Borrower and/or any Restricted Subsidiary to any equityholder of any Parent Company or any Employee Related Person of any Parent Company, the Borrower or any subsidiary to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.03(a);
(p) any Refinancing Indebtedness in respect of any Indebtedness permitted under clauses (a), (c), (i), (j), (m), (n), (q), (r), (u), (w), (x), (y), (ff), (gg) and (hh) of this Section 6.01 and any subsequent Refinancing Indebtedness in respect thereof that also complies with the provisions contained in this clause (p); provided, that:
(i) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded or replaced, except by (A) an amount equal to unpaid accrued interest and premiums (including tender premiums) thereon plus underwriting discounts, other reasonable and customary fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts permitted to be incurred pursuant to this Section 6.01 (provided, that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this clause (p) (with additional amounts incurred in reliance on this clause (C) constituting a utilization of the relevant basket or exception pursuant to which such additional amount is permitted) and (2) if such additional Indebtedness is secured, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) in the case of Refinancing Indebtedness with respect to clauses (a), (c), (q), (w) and/or (y), such Indebtedness (other than customary bridge loans, so long as any Indebtedness for which such loans are exchanged for or that otherwise replaces such loans satisfies the requirements of this clause (ii)) has (A) a final maturity no earlier than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being refinanced, refunded or replaced,
(iii) in the case of Refinancing Indebtedness with respect to clause (a), (c), (q), (w) and/or (y), the terms of such Refinancing Indebtedness (excluding pricing, fees, premiums, rate floors, final maturity or commitment termination, amortization, prepayments and redemptions (including restrictions on prepayment and redemptions)) either (A) are not (when taken as a whole and as reasonably determined by the Borrower and as certified to the Administrative Ageny by a Responsible Officer of the Borrower) more favorable to the creditors providing such Refinancing Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than any terms that are applicable only after the Latest Term Loan Maturity Date as of the date of such refinancing, refunding or replacement) or (B) reflect market terms and conditions (when taken as a whole and as reasonably determined by the Borrower in good faith and as certified in writing by the Borrower to the Administrative Agent) for the applicable type of Indebtedness,
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (c), (j), (m), (r), (u), (w) (except to the extent incurred under the Incurrence-Based Amount), (y) (except to the extent incurred under the Incurrence-Based Amount) (ff), (gg) and (hh), the outstanding principal amount of such Refinancing Indebtedness incurrence under this clause (p) shall be deemed an amount outstanding in reliance on the relevant clause,
(v) except in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clause (a), (A) such Refinancing Indebtedness, if secured, is secured only by Permitted Liens that secured such Indebtedness immediately prior to such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing the Indebtedness being refinanced, refunded or replaced were contractually subordinated to the Liens on the Collateral securing the Credit Facilities, the Liens securing such Refinancing Indebtedness are subordinated to the Liens on the Collateral securing such Credit Facilities on terms not less favorable (as reasonably determined by the Borrower, the Administrative Agent and the Lead Lender), taken as a whole, to the Lenders than those (x) not greater than 4.00:1.00 applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole, or (y) set forth in an Intercreditor Agreement, (B) such Refinancing Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced (it being understood that any Person (other than Holdings) that was a guarantor in respect of the Indebtedness being refinanced, refunded or replaced may be the primary obligor in respect of such Refinancing Indebtedness, and any Person that was the primary obligor in respect of the Indebtedness being refinanced, refunded or replaced may be a guarantor in respect of such Refinancing Indebtedness) and (C) if the Indebtedness being refinanced, refunded or replaced was contractually subordinated in right of payment to the Obligations or was unsecured, such Refinancing Indebtedness is contractually subordinated in right of payment to the Obligations or is unsecured, as applicable, on terms not greater less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those applicable to the Indebtedness being refinanced, refunded or replaced, and
(vi) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clause (a), (A) if such Refinancing Indebtedness is secured, it is not secured by any assets other than the First Lien Senior Secured Leverage Ratio immediately prior Collateral (or by assets that become Collateral substantially concurrently with the incurrence of such Indebtedness) and is subject to an Intercreditor Agreement, (B) if such Refinancing Indebtedness is Guaranteed, it shall not be Guaranteed by any Person other than the Loan Parties (other than a person that becomes a Loan Party substantially concurrently with the incurrence of such Indebtedness) and (C) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; and
(vii) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clause (a), such Refinancing Indebtedness must first have been offered to all Lenders on the same terms.
(q) Indebtedness of the Borrower and/or any Restricted Subsidiary incurred to finance any acquisition or similar Investment permitted hereunder that is either secured by Liens on the Collateral that are junior to the consummation Liens securing the Credit Facilities or are unsecured in an aggregate outstanding principal amount not to exceed an unlimited amount so long as after giving effect thereto on a Pro Forma Basis (including any acquisition consummated concurrently therewith and any other application of such Permitted Acquisition and the incurrence proceeds thereof (without “netting” the cash proceeds thereof), in each case as of the last day of or assumption of such Indebtedness and for the most recently ended Test Period, (A) [reserved], (B) if such Indebtedness is a term loan facility secured by Liens on the Collateral junior to the Liens securing the Credit Facilities, the Secured Net Leverage Ratio would not exceed 4.50:1.00 and (C) if such Indebtedness is unsecured, the Total Net Leverage Ratio would not exceed 4.50:1.00; provided that, in the case of any such Indebtedness of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (AI) such Indebtedness shall not mature be guaranteed by any Person that is not a Loan Party (other than a person that becomes a Loan Party substantially concurrently with the effectiveness of such Indebtedness) and shall not be secured by any assets other than the Collateral (or by assets that become Collateral substantially concurrently with the effectiveness of such Indebtedness), (II) the final maturity date of such Indebtedness shall be no earlier than the date that is 91 days after the Latest Term Loan Maturity Date with respect to the relevant Term Loans being refinanced, (BDate) as of the date of the incurrence of such Indebtedness, and the Weighted Average Life to Maturity of such Indebtedness shall not be no shorter than that the then remaining Weighted Average Life to Maturity of any then-remaining existing Class of Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect without giving effect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions reduction of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date any required amortization payments from any prepayments of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and Loans), provided that, in each case, such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only may be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of customary bridge loans so long as any Indebtedness for purposes which such loans are exchanged for or that otherwise replaces such loans satisfies the requirements of this Section 7.03.clause (II), (III) in the case of any s
Appears in 1 contract
Sources: Credit Agreement (Cano Health, Inc.)
Indebtedness. Create, issue, incur, assume assume, become liable in respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower and any of its Subsidiaries Loan Party under the Loan Documentsthis Agreement;
(b) Indebtedness of the Borrowers Loan Parties under the Term Loan Credit Agreement (and any Permitted Refinancing Indebtedness in respect thereof) in an aggregate amount not to exceed (i) $875,000,000, plus (ii) the Base Incremental Amount plus (iii) the Voluntary Prepayment Amount plus (iv) the Maximum Term Loan Incremental Amount;
(c) Indebtedness of the Senior Secured Notes Borrower or any Restricted Subsidiary owing to the Borrower or any Restricted Subsidiary; provided that (i) any Indebtedness of any Loan Party shall be unsecured and shall be subordinated in right of payment to the Obligations on terms customary for intercompany subordinated Indebtedness, as reasonably determined by the Administrative Agent and (ii) any such Indebtedness owing by any Restricted Subsidiary that is not a Loan Party to any Loan Party shall be incurred in compliance with Section 7.7;
(d) Guarantee Obligations incurred by any Group Member of obligations of any Group Member to the extent such obligations are not prohibited hereunder; provided that (i) to the extent any such obligations are subordinated to the Obligations, any such related Guarantee Obligations incurred by a Loan Party shall be subordinated to the guarantee of such Loan Party of the Obligations on terms no less favorable to the Lenders than the subordination provisions of the obligations to which such Guarantee Obligation relates and (ii) any Guarantee Obligations incurred by any Loan Party of obligations of a Restricted Subsidiary that is not a Loan Party shall be permitted to the extent the aggregate amount of outstanding Guarantee Obligations incurred pursuant to this clause (ii) does not exceed $25,000,000;
(e) Indebtedness outstanding on the Closing Date (provided that Indebtedness in an aggregate principal amount in excess of $5,000,000 shall be listed on Schedule 7.2(e)) and any Permitted Refinancing Indebtedness in respect thereof;
(f) Indebtedness of any Group Member incurred to finance the acquisition of fixed or capital assets (and Guarantees thereof by the Guarantorsany Permitted Refinancing Indebtedness in respect thereof) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereof;
(c) (i) Indebtedness of the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed 25,000,000 at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Periodoutstanding;
(g) Indebtedness in respect of Swap Contracts (i) entered into to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees employees, officers or directors of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(jh) Indebtedness to current or former officers, directors, partners, managers, consultants and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding;
(k) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary coursecourse of business and owed in respect of any overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-house transfers of funds;
(ni) Indebtedness consisting arising under any Swap Agreement permitted by Section 7.11;
(j) Indebtedness (other than for borrowed money) that may be deemed to exist pursuant to any guarantees, warranty or contractual service obligations, performance, surety, statutory, appeal, bid, prepayment guarantee, payment (other than payment of (aIndebtedness) the financing or completion of insurance premiums performance guarantees or (b) take or pay similar obligations contained in supply arrangements, in each case, incurred in the ordinary course of business;
(ok) Indebtedness incurred by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankersworkers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, payment obligations in connection with health, disability or other employee benefits or propertytypes of social security benefits, casualty or liability insurance or self-insurance unemployment or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(p) obligations in respect of performanceinsurance obligations, bid, appeal reclamation and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related theretostatutory obligations, in each case in the ordinary course of business business;
(l) Indebtedness arising from the honoring by a bank or consistent other financial institution of a check, draft or similar instrument drawn against insufficient funds, so long as such Indebtedness is covered or extinguished within five Business Days;
(m) Indebtedness consisting of (i) the financing of insurance premiums or self-insurance obligations or (ii) take-or-pay obligations contained in supply or similar agreements in each case in the ordinary course of business;
(n) Indebtedness in the form of purchase price adjustments (including in respect of working capital), earnouts, deferred compensation, indemnification or other arrangements representing acquisition consideration or deferred payments of a similar nature incurred in connection with past practicethe Acima Acquisition, any Permitted Acquisitions or other Investments permitted under Section 7.7 or Dispositions permitted under Section 7.5;
(o) (i) Indebtedness of any Person that becomes a Restricted Subsidiary (or of any Person not previously a Restricted Subsidiary that is merged or consolidated with or into the Borrower or a Restricted Subsidiary in a transaction permitted hereunder) after the Closing Date, or Indebtedness of any Person that is assumed by the Borrower or any Restricted Subsidiary in connection with an acquisition of assets by the Borrower or such Restricted Subsidiary in a Permitted Acquisition; provided that such Indebtedness exists at the time such Person becomes a Restricted Subsidiary (or is so merged or consolidated) or such assets are acquired and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary (or such merger or consolidation) or such assets or Capital Stock being acquired and (ii) Permitted Refinancing Indebtedness in respect of such Indebtedness; provided that after giving effect to the applicable acquisition (or merger or consolidation) or such assumption of Indebtedness, the Consolidated Leverage Ratio for the Applicable Reference Period, calculated on a Pro Forma Basis as of the date of such acquisition (or merger or consolidation) or assumption, is equal to or less than either (A) 3.00 to 1.00 or (B) the Consolidated Leverage Ratio for the Applicable Reference Period, calculated on a Pro Forma Basis immediately prior to such acquisition (or merger or consolidation) or assumption; provided further that the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties outstanding under this Section 7.2(o) shall not exceed $20,000,000;
(p) Guarantee Obligations of the Borrower or any Restricted Subsidiary in respect of Indebtedness of franchisees in an aggregate amount not to exceed $25,000,000 at any time outstanding;
(q) Indebtedness supported by a Letter of Credit the Borrower and any Restricted Subsidiary to the Insurance Subsidiary in a an aggregate principal amount not to exceed $75,000,000 at any time outstanding that cannot be subordinated to the face amount obligations of such Letter of Creditany Loan Party under the Loan Documents for regulatory reasons or would cause the carrying value for regulatory valuation purposes to be increased;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or Insurance Subsidiary permitted by Section 7.7(v)(i);
(s) Indebtedness permitted to survive the Closing Date under the terms of the Acima Acquisition Agreement (provided that Indebtedness in an aggregate principal amount in excess of $2,500,000 shall be listed on Schedule 7.2(s)) and any Restricted Subsidiary Permitted Refinancing Indebtedness in respect thereof;
(t) Term Loan Incremental Equivalent Debt (and any Permitted Refinancing Indebtedness in respect thereof) in an aggregate amount not to exceed (Ax) $1,000,000,000 the Base Incremental Amount plus (y) the Term Loan Voluntary Prepayment Amount plus (z) the Maximum Term Loan Incremental Amount; provided that immediately prior to and immediately after giving effect to the incurrence of any Indebtedness under this Section 7.2(t), no Default or Event of Default shall have occurred and be continuing;
(i) Permitted Unsecured Indebtedness so long as, at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of such Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Unsecured Indebtedness, so long as either (x) the Total Consolidated Leverage Ratio (for the Applicable Reference Period, calculated on a Pro Forma Basis) Basis as of the end date of the most recent Test Period incurrence thereof, is not greater equal to or less than 7.00:1.00 either (A) 2.75 to 1.00 or (yB) in the Fixed Charge Coverage case of any such Indebtedness incurred in connection with a Permitted Acquisition or Investment, the Consolidated Leverage Ratio (for the Applicable Reference Period, calculated on a Pro Forma Basis) for the end Basis immediately prior to incurrence of the most recent Test Period is not less than 2.00:1.00such Permitted Unsecured Indebtedness; provided further that, in that (A) immediately prior to and immediately after giving effect to the case incurrence of any Permitted Unsecured Indebtedness incurred under this clause (rSection 7.2(u), no Default or Event of Default shall have occurred and be continuing and (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3B) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Permitted Unsecured Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2outstanding under this Section 7.2(u) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) exceed $20,000,000 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(uv) (i) Indebtedness incurred by any Securitization Subsidiary in connection with any Qualified Securitization Transaction and (ii) Standard Securitization Undertakings incurred by any Group Member in connection with any Qualified Securitization Transaction; provided that (A) the aggregate principal amount of Indebtedness outstanding under this Section 7.2(v) shall not exceed $500,000,000 and (B) at least five (5) Business Days prior to the incurrence of any such Indebtedness or Standard Securitization Undertakings, the Borrower shall have provided the Administrative Agent with a certificate of a Responsible Officer certifying that the consummation of such Qualified Securitization Transaction is permitted hereunder and that attached thereto are drafts of the definitive documentation relating thereto;
(w) additional Indebtedness of the Borrower or any of its Restricted Subsidiaries in an aggregate principal amount (for the Borrower and all Restricted Subsidiaries) not to exceed at any time outstanding the greater of (i) $250,000,000 and (ii) 50% of Consolidated EBITDA (for the Applicable Reference Period); provided that the aggregate principal amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties outstanding under this Section 7.2(w) shall not exceed $50,000,000;
(x) Attributable Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period 15,000,000 at any one time outstanding;
(v) , in each case which Attributable Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate arises out of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) sale and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financingleaseback transaction permitted under Section 7.10;
(y) Indebtedness of any Loan Party in respect an aggregate principal amount not to exceed the Net Cash Proceeds (Not Otherwise Applied) received after the Closing Date and on or prior to such date from any issuance of Permitted Debt Exchange Notes Qualified Capital Stock by the Borrower (other than any such issuance to a Group Member);
(z) Guarantee Obligations incurred by any Group Member of obligations of any Joint Venture or Unrestricted Subsidiary to the extent permitted under Section 7.7(u);
(aa) Indebtedness of the Borrower to the Insurance Subsidiary in connection with an Investment that is permitted pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof7.7(z); and
(zbb) all premiums (if any)the Unsecured Notes in an aggregate principal amount not to exceed $450,000,000 and, interest (including post-petition interest)in each case, fees, expenses, charges and additional or contingent interest on obligations described any Permitted Refinancing Indebtedness in clauses (a) through (y) aboverespect thereof. For purposes of determining compliance with this Section 7.03Section 7.2, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a(a) through (z(bb) above, the Parent Borrower shallmay, in its sole discretion, divide or classify and reclassify or later divide, classify or reclassify all or a portion of such item of Indebtedness (or any portion thereof) in a manner that complies with this Section 7.2 and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents and the Term Loan Credit Agreement and, in each case, any Permitted Refinancing Indebtedness in respect thereof, will at all times be deemed to have been incurred be outstanding in reliance only on the exception in clause (aSection 7.2(a) and Section 7.2(b), respectively. For the avoidance of this Section 7.03 doubt, a permitted refinancing in respect of Indebtedness incurred pursuant to a Dollar-denominated or Consolidated EBITDA-governed basket shall not increase capacity to incur Indebtedness under such Dollar-denominated or Consolidated EBITDA-governed basket, and the Senior Secured Notes will such Dollar-denominated or Consolidated EBITDA-governed basket shall be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed continue to be an incurrence utilized by the amount of the original Indebtedness for purposes of this Section 7.03incurred unless and until the Indebtedness incurred to effect such permitted refinancing is no longer outstanding.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness in the case of the Parent Borrower:
(A) Indebtedness in respect of Swap Contracts required pursuant to, and entered into in accordance with, Section 6.17 or other Swap Contracts designed to hedge against commodity price or foreign currency exchange rate risk entered into in the ordinary course of business and not for speculative purposes;
(B) Indebtedness owed to a wholly owned Subsidiary of the Borrower, which Indebtedness (x) shall, in the case of Indebtedness owed to a Loan Party, constitute Pledged Debt, (y) shall be on terms reasonably acceptable to the Administrative Agent and (z) evidenced by promissory notes in form and substance reasonably satisfactory to the Administrative Agent and such promissory notes shall, in the case of Indebtedness owed to a Loan Party, be pledged as security for the Obligations of the holder thereof under the Loan Documents to which such holder is a party and delivered to the Administrative Agent pursuant to the terms of the Security Agreement; provided that such Indebtedness owed by the Borrower to a Subsidiary which is not a Loan Party shall be subordinated to this Facility on terms reasonably satisfactory to the Administrative Agent; and
(C) Indebtedness evidenced by the Subordinated Notes, the Bridge Facility and the Permanent Securities, as the case may be,
(b) in the case of any Subsidiary of the Borrower, Indebtedness owed to the Borrower or to a wholly owned Subsidiary of the Borrower that is a Loan Party, provided that, in each case, such Indebtedness (x) shall constitute Pledged Debt, (y) shall be on terms reasonably acceptable to the Administrative Agent and (z) shall be evidenced by promissory notes in form and substance reasonably satisfactory to the Administrative Agent and such promissory notes shall be pledged as security for the Obligations of the holder thereof under the Loan Documents to which such holder is a party and delivered to the Administrative Agent pursuant to the terms of the Security Agreement; provided that such Indebtedness owed to the Borrower or another Loan Party by any Subsidiary that is not a Loan Party that is incurred after the Closing Date shall not exceed $15,000,000 when aggregated with all outstanding Indebtedness permitted under Section 7.02(c)(R) and Investments permitted under Sections 7.03 (q) and (s) that are incurred or made after the Closing Date; and
(c) in the case of the Borrower and any of its Subsidiaries Subsidiaries,
(A) Indebtedness under the Loan Documents;
(bB) Guarantees of the Subordinated Notes;
(C) Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the Borrowers time of such refinancing, refunding, renewal or extension except by an amount equal to accrued and unpaid interest, premium or other prepayment amount paid, and fees, costs and expenses reasonably incurred, in respect connection with such refinancing and 91 by an amount equal to any existing commitments unutilized thereunder and the direct and contingent obligors thereof shall not be changed, as a result of or in connection with such refinancing, refunding, renewal or extension; provided still further that the Senior Secured Notes terms relating to principal amount, amortization, maturity, collateral (if any) and Guarantees thereof by subordination (if any), and other material terms taken as a whole, of any such extending, refunding or refinancing Indebtedness (other than the Guarantors) overdraw line of credit between Bank of Ireland and True Temper Limited, in an aggregate principal a maximum amount not to exceed $2,250,000,000 (eurodollar)500,000; provided the maximum principal amount of Indebtedness available under such line of credit is not increased by such refinancing), and of any Permitted Refinancing thereofagreement entered into and of any instrument issued in connection therewith, are no less favorable in any material respect to the Loan Parties or the Lenders than the terms of any agreement or instrument governing the Indebtedness being extended, refunded or refinanced and the interest rate applicable to any such extending, refunding or refinancing Indebtedness does not exceed the then applicable market interest rate;
(cD) (i) Indebtedness Guarantees of the Parent Borrower and or any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Guarantor in respect of Indebtedness of the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03); provided that, if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(e) Indebtedness of the Parent Borrower or any Restricted Subsidiary owing to the Parent Borrower or any other Restricted Guarantor;
(E) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or arising under any Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person, and not for purposes of speculation or taking a "market view;" and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the extent constituting an Investment permitted by Section 7.02; provided that all such defaulting party;
(F) Indebtedness in respect of any Loan Party owed to any Person that is not a Loan Party shall be subject to Capitalized Leases, Synthetic Lease Obligations and purchase money obligations for fixed or capital assets within the subordination terms limitations set forth in Section 3.01 7.01(a)(E); provided, however, that the aggregate amount of the Guaranty;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (provided that all such Indebtedness is incurred concurrently with or within two hundred seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (x) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does shall not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period5,000,000;
(gG) Indebtedness in respect of Swap Contracts (i) entered into which may be deemed to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure (other than those in respect of shares of capital stock or other equity ownership interests of the Parent Borrower or any Subsidiary), (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect exist pursuant to any interest-bearing liability performance, surety, statutory, appeal or investment of the Parent Borrower or any Subsidiary and (iii) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) and its Restricted Subsidiaries similar obligations incurred in the ordinary course of business;
(jH) Indebtedness of the Borrower and its Subsidiaries arising in respect of netting services or overdraft protections with respect to current deposit or former officerschecking accounts;
(I) Indebtedness incurred or assumed by the Borrower and its Subsidiaries as a result of acquisitions permitted pursuant to Section 7.03 that is unsecured or secured only by the assets or property so acquired or on the assets or property of the Person so acquired (together with replacements, directorssubstitutions, partnersattachments, managersaccessions and proceeds and products thereof to the extent covered thereby), consultants (ii) that was not incurred in contemplation of any such acquisition, and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereofiii) permitted by Section 7.06 in an aggregate amount that shall not to exceed $20,000,000 10,000,000 in the aggregate at any one time outstanding;
(kJ) Indebtedness incurred by of the Parent Borrower or any of and its Restricted Subsidiaries in a Permitted Acquisition, any other Investment expressly connection with acquisitions permitted hereunder or any Disposition, in each case by Section 7.03 and payable to the extent constituting indemnification obligations corresponding sellers of an acquired business or entity (whether through an asset purchase, equity purchase or merger or consolidation or otherwise) in the form of seller notes, earn-outs, indemnities or obligations in respect of purchase price (including earn-outs) or other similar adjustmentsadjustments in connection with any such acquisition in an aggregate amount at any time outstanding not to exceed $10,000,000; provided such Indebtedness is subordinated to the Loans hereunder on terms reasonably satisfactory to the Administrative Agent;
(lK) Indebtedness consisting of obligations of the Parent Borrower or any of its Restricted Subsidiaries under deferred compensation consisting of guarantees, earn-outs, indemnities or other similar arrangements incurred by such Person obligations in respect of purchase price adjustments in connection with the Transaction disposition of assets, including, without limitation, shares of capital stock; provided that the maximum aggregate liability in respect of all such obligations outstanding under this clause (K) shall at no time exceed the gross proceeds actually received by the Borrower and Permitted Acquisitions or any other Investment expressly permitted hereunderits Subsidiaries in connection with such disposition;
(mL) Cash Management Obligations guaranties in the ordinary course of business of operating leases and the obligations of suppliers, customers, franchisees and licensees of the Borrower and its Subsidiaries in circumstances and covering matters consistent with past practices;
(M) the obtaining of credit customarily extended and in fact extended in connection with normal purchase of goods and services;
(N) obligations consisting of management fees owed to the Equity Investors (whether or not paid when due) to the extent permitted under Section 7.08 and other Indebtedness obligations on account of non-current trade payables or accounts payable which the Borrower or its applicable Subsidiary is contesting in good faith and by appropriate proceedings diligently conducted and with respect to which adequate reserves have been established and are being maintained in accordance with GAAP;
(O) endorsements for collection, deposit or negotiation and warranties of netting products or services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary course;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(oP) Indebtedness incurred permitted by the Parent Borrower or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claimsSection 7.03(c);
(p) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Parent Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qQ) Indebtedness supported by of any Foreign Subsidiary of the Borrower owed to a Letter third party (other than a Loan Party or a Subsidiary of Credit in a principal amount not to exceed Loan Party) existing on the face amount of Closing Date and all other such Letter of Credit;
(r) (i) other unsecured or junior lien third party Indebtedness of the Parent Borrower or any Restricted such Foreign Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time 5,000,000 as to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteriaall Foreign Subsidiaries;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(z) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of Holdings, the Parent Borrower and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness (i) outstanding on the Original Closing Date and listed on Schedule 7.03(b), provided that the letters of the Borrowers credit and surety bonds listed thereon must be backstopped by a Letter of Credit issued hereunder and, other than in respect of the Senior Secured Notes (and Guarantees thereof by the Guarantors) in an aggregate principal amount not to exceed $2,250,000,000 and any letter of credit or any surety bond listed thereon or any drawing upon any such letter of credit or surety bond, any Permitted Refinancing thereof; and (ii) intercompany Indebtedness outstanding on the Original Closing Date;
(c) (i) Indebtedness of Guarantees by Holdings, the Parent Borrower and or any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower and its Restricted Subsidiaries Subsidiary in respect of Indebtedness of Holdings, the Parent Borrower or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial a Restricted Subsidiary that is not a Loan Party may not, by virtue of this Section 7.03(d7.03(c), guarantee Guarantee Indebtedness that such Immaterial Restricted Subsidiary could not otherwise incur under this Section 7.03); provided thatthat (A) no Guarantee by any Restricted Subsidiary of any High Yield Note, Junior Financing or Permitted Refinancing Indebtedness shall be permitted unless such Restricted Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty and (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such Indebtedness;
(ed) Indebtedness of Holdings, the Parent Borrower or any Restricted Subsidiary owing to Holdings, the Parent Borrower or any other Restricted Subsidiary to the extent constituting an Investment permitted by Section 7.02; provided that that, all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 5.03 of the GuarantySecurity Agreement;
(f) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Leases) financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (assets, other than software; provided that such Indebtedness is incurred concurrently with or within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred outstanding at any one time pursuant to clause (ii)) under this Section 7.03(f7.03(e) does shall not exceed the greater of (x) $350,000,000 and (y) 20.05% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test PeriodTotal Assets at such time;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates or commodities pricing risks incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Borrower, any Foreign Subsidiary or any Guarantor (i) entered into assumed in connection with any Permitted Acquisition or (ii) incurred to hedge finance a Permitted Acquisition, in each case, that is secured only by the assets or mitigate risks business acquired in the applicable Permitted Acquisition (including any acquired Equity Interests) and so long as both immediately prior and after giving effect thereto, (A) no Default shall exist or result therefrom, (B) Holdings, the Borrower and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenant set forth in Section 7.11 for the Test Period in effect at the time of the assumption or incurrence of such Indebtedness and (C) the aggregate principal amount of such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof at any time outstanding pursuant to which this paragraph (g) does not exceed $145,000,000; provided that the Parent aggregate amount of Indebtedness outstanding at Persons that are not Loan Parties pursuant to this clause (g) and clause (n) below shall not exceed $100,000,000 at any one time;
(i) Indebtedness of Holdings, the Borrower or any Restricted Subsidiary (A) assumed in connection with any Permitted Acquisition; provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition, or (B) incurred to finance a Permitted Acquisition and (ii) any Permitted Refinancing of the foregoing; provided that, in each case, such Indebtedness and all Indebtedness resulting from any Permitted Refinancing thereof (v) is unsecured, (w) both immediately prior and after giving effect thereto, (1) no Default shall exist or result therefrom and (2) Holdings, the Borrower and the Restricted Subsidiaries will be in Pro Forma Compliance with the covenant set forth in Section 7.11 for the Test Period in effect at the time of the assumption or incurrence of such Indebtedness, (x) matures after, and does not require any scheduled amortization or other scheduled payments of principal prior to, the Latest Maturity Date in effect at the time such Indebtedness is incurred (it being understood that such Indebtedness may have mandatory prepayment, repurchase or redemptions provisions satisfying the requirement of clause (y) hereof), (y) has actual or anticipated exposure terms and conditions (other than those in respect of shares of capital stock or other equity ownership interests interest rate, redemption premiums and subordination terms), taken as a whole, that are not materially less favorable to the Borrower as the terms and conditions of the Parent High Yield Notes as of the Original Closing Date; provided that a certificate of a Responsible Officer delivered to the Administrative Agent at least five Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower or any Subsidiaryhas determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees), and (ii) entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwisez) with respect to such Indebtedness described in the immediately preceding clause (B) or any interest-bearing liability or investment of Permitted Refinancing thereof, is incurred by the Parent Borrower or a Guarantor; provided further that notwithstanding anything contained in the Loan Documents to the contrary, (a) the maximum principal amount of all Indebtedness described in clause (A) of this paragraph (together with any Permitted Refinancing of Indebtedness in respect thereof) with respect to which a Restricted Subsidiary that is not a Guarantor may become liable shall be $145,000,000 and (iiib) entered into to hedge commodities, currencies, general economic conditions, raw materials prices, revenue streams or business performance;
(h) Guarantee Obligations the only obligors with respect to, to any Indebtedness incurred pursuant to clause (A) of this paragraph or the assumption of, any Permitted Refinancing of Indebtedness in respect thereof shall be of Franchisees, suppliers, distributors or licensees those Persons who were obligors of the Parent Borrower and its Restricted Subsidiaries, in each case such Indebtedness immediately prior to the extent permitted by Section 7.02(y)such Permitted Acquisition;
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of and the Parent Borrower) and its Restricted Subsidiaries incurred in the ordinary course of business;
(j) Indebtedness to current or former officers, directors, partners, managers, consultants directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings (or any direct or indirect parent thereof) permitted by Section 7.06 in an aggregate amount not to exceed $20,000,000 at any one time outstanding7.06;
(k) Indebtedness incurred by Holdings, the Parent Borrower or any of its Restricted Subsidiaries Subsidiary in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each case Disposition to the extent constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(l) Indebtedness consisting of obligations of Holdings, the Parent Borrower or any of its Restricted Subsidiaries Subsidiary under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(m) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in the ordinary courseconnection with deposit accounts;
(n) Indebtedness in an aggregate principal amount not to exceed $362,500,000, at any time outstanding; provided that a maximum of $145,000,000 in aggregate principal amount of such Indebtedness (less the aggregate principal amount of Indebtedness of Foreign Subsidiaries that are not Guarantors outstanding at any time under Section 7.03(g)) may be incurred by Foreign Subsidiaries that are not Guarantors;
(o) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(op) Indebtedness incurred by Holdings, the Parent Borrower or any of its the Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers workers’ compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(pq) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by Holdings, the Parent Borrower or any of its the Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;
(qr) [Reserved];
(s) Indebtedness supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(rt) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary in an aggregate amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms High Yield Notes and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof;
(s) Indebtedness incurred by a Non-Loan Party, and guarantees thereof by Non-Loan Party, in an aggregate principal amount not to exceed (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time pursuant to asset based revolving facilities provided by commercial banks or similar financial institutions; provided that (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, provided that (i) after giving Pro Forma Effect to such Permitted Acquisition and such Indebtedness, the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) as of the last day of the most recently ended Test Period is either (x) not greater than 4.00:1.00 or (y) not greater than the First Lien Senior Secured Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B) being referred to as “Permitted Credit Facilities Acquisition Debt”) and (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinanced, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date of the Term Loans being refinanced) reflect market terms and conditions on the date of issuance and such Indebtedness shall not participate in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereof;
(x) Indebtedness with respect to any Permitted Receivables Financing;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereofIndebtedness; and
(zv) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (yv) above. For purposes of determining compliance with this Section 7.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through (z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will be deemed to have been incurred in reliance only on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.
Appears in 1 contract
Sources: Credit Agreement (Travelport LTD)
Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent Borrower Company and any of its Subsidiaries under the Loan Documents;
(b) Indebtedness of (i) outstanding on the Borrowers in respect of the Senior Secured Notes (Closing Date and Guarantees thereof by the Guarantorslisted on Schedule 7.03(b) in an aggregate principal amount not to exceed $2,250,000,000 and any Permitted Refinancing thereofthereof and (ii) intercompany Indebtedness outstanding on the Closing Date;
(c) (i) Indebtedness of Guarantees by the Parent Borrower and any of its Restricted Subsidiaries in respect of any Ratably Secured Existing Notes, (ii) Surviving Indebtedness listed on Schedule 7.03(c) and (iii) any Permitted Refinancing of any of the foregoing;
(d) Guarantee Obligations of the Parent Borrower Company and its Restricted Subsidiaries in respect of Indebtedness of the Parent Borrower Company or any Restricted Subsidiary otherwise permitted hereunder (except that an Immaterial Subsidiary may not, by virtue of this Section 7.03(d), guarantee Indebtedness that such Immaterial Subsidiary could not otherwise incur under this Section 7.03)hereunder; provided thatthat (A) no Guarantee by any Subsidiary of any Junior Financing shall be permitted unless such Subsidiary shall have also provided a Guarantee of the Obligations substantially on the terms set forth in the Guaranty, (B) if the Indebtedness being guaranteed Guaranteed is subordinated to the Obligations, such Guarantee Obligation shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Lenders as those contained in the subordination of such IndebtednessIndebtedness and (C) any Guarantee of any Incremental Equivalent Debt, any Credit Agreement Refinancing Indebtedness or any Permitted Ratio Debt (or any Permitted Refinancing in respect thereof) shall only be permitted if it meets the requirements of the respective definitions (and component definitions) thereof and clause (s), (t) or (x) of this Section 7.03, as applicable;
(ed) Indebtedness of the Parent Borrower Company or any Restricted Subsidiary owing to the Parent Borrower Company or any other Restricted Subsidiary Subsidiary, to the extent constituting an Investment permitted by Section 7.02; provided that all such Indebtedness of any Loan Party owed to any Person that is not a Loan Party shall be subject to the subordination terms set forth in Section 3.01 of the GuarantyIntercompany Note;
(fe) (i) Attributable Indebtedness and other Indebtedness (including Capitalized Finance Leases) of the Company and its Subsidiaries financing the acquisition, construction, repair, replacement or improvement of fixed or capital assets (including reconstruction, refurbishment, renovation and development of real property); provided that such Indebtedness is incurred concurrently with or 225989119_4 within two hundred and seventy (270) days after the applicable acquisition, construction, repair, replacement or improvement), (ii) Attributable Indebtedness of the Company and its Subsidiaries arising out of Permitted Sale Leasebacks in an aggregate principal amount not to exceed at any one time outstanding the greater of (xsale-leaseback transactions permitted by Section 7.05(f) $100,000,000 and (y) 6.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period and (iii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clauses (i) and (ii); provided that the aggregate principal amount of Indebtedness (including without limitation Attributable Indebtedness, but excluding Attributable Indebtedness incurred pursuant to clause (ii)) under this Section 7.03(f) does not exceed the greater of (x) $350,000,000 and (y) 20.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period;
(gf) Indebtedness in respect of Swap Contracts designed to hedge against interest rates, foreign exchange rates risks or commodities pricing incurred in the ordinary course of business and not for speculative purposes;
(g) Indebtedness of the Company or any Subsidiary (A) assumed in connection with any Permitted Acquisition (provided that such Indebtedness is not incurred in contemplation of such Permitted Acquisition) or (B) incurred to finance a Permitted Acquisition and, in the case of either (A) or (B), any Permitted Refinancing thereof; provided, (x) no Default shall exist or result therefrom and (y) if such Indebtedness is (1) secured on a pari passu basis with or senior to (in the case of clause (A)) the Obligations, the Company and its Subsidiaries will be in Pro Forma Compliance with a Consolidated Secured Net Leverage Ratio of no greater than 3.50:1.00 and (2) unsecured, the Company and its Subsidiaries will be in Pro Forma Compliance with the Financial Covenants; provided, further, in the case of clause (B) above, such Indebtedness (i) entered into will not mature prior to hedge or mitigate risks to which the Parent Borrower or any Subsidiary has actual or anticipated exposure date that is ninety-one (other than those in respect of shares of capital stock or other equity ownership interests 91) days after the Latest Maturity Date at the time of the Parent Borrower or any Subsidiary)issuance of such Indebtedness, (ii) entered into in order will not have mandatory prepayment or mandatory amortization prepayments (other than asset sale and change of control mandatory offers to effectively cap, collar or exchange interest rates repurchase customary for high-yield debt securities) prior to the date that is ninety-one (from fixed to floating rates, from one floating rate to another floating rate or otherwise91) with respect to any interest-bearing liability or investment days after the Latest Maturity Date at the time of the Parent Borrower or any Subsidiary and issuance of such Indebtedness (other than, in the case of clause (1) of this proviso, for annual nominal amortization payments not to exceed 1% of the original aggregate principal amount of such Indebtedness), (iii) entered into in the case of clause (1) of this proviso, shall be subject to hedge commoditiesa First Lien Intercreditor Agreement, currencies(iv) if incurred by a Non-Loan Party, general economic conditionsshall not exceed in aggregate principal amount for all Indebtedness of Non-Loan Parties incurred pursuant to this clause (g) the greater of (i) $65,000,000 and (ii) 2.0% of Total Assets at any time outstanding, raw materials prices(v) in the case of clause (A) above, revenue streams or business performancesuch Indebtedness is secured only by Liens permitted pursuant to Section 7.01(p)(x), and (vi) in the case of clause (B) above, the terms and conditions of such Indebtedness are not materially more restrictive (taken as a whole) in respect to the Company and its Subsidiaries than those set forth in this Agreement;
(h) Guarantee Obligations with respect to, or the assumption of, Indebtedness of Franchisees, suppliers, distributors or licensees of the Parent Borrower and its Restricted Subsidiaries, in each case to the extent permitted by Section 7.02(y);
(i) Indebtedness representing deferred compensation to employees of the Parent Borrower (or any direct or indirect parent of the Parent Borrower) Company and its Restricted Subsidiaries incurred in the ordinary course of business;
(ji) Indebtedness consisting of promissory notes (A) issued by any Loan Party to current or former officers, directors, partners, managers, consultants and employees, their respective estates, heirs, permitted transferees, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings the Company permitted by Section 7.06; provided that (i) such Indebtedness shall be subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent and (ii) the aggregate amount of all cash payments (whether principal or interest) made by the Loan Parties in respect of such notes in any calendar year, when combined with the aggregate amount of Restricted Payments made pursuant to Section 7.06(f) in such calendar year, shall not exceed $40,000,000, provided that any unused amounts in any calendar year may be carried over to succeeding calendar years, so long as the aggregate amount of all cash payments made in respect of such notes in any calendar year (after giving effect to such carry forward), when aggregated with the aggregate amount of Restricted Payments made pursuant to Section 7.06(f) in such calendar year (after giving effect to such carry forward), shall not exceed $50,000,000; provided, further, that such amount in any calendar year may be increased by an amount not to exceed the remainder of (x) the sum of (1) the amount of Net Cash Proceeds of 225989119_4 issuances of Equity Interests to the extent that such Net Cash Proceeds shall have been actually received by OSI through a capital contribution of such Net Cash Proceeds by the Company (and to the extent not used to make an Investment pursuant to Section 7.02(m) or (t), prepay Junior Financings pursuant to Section 7.12(a)(v), or make a Restricted Payment pursuant to Section 7.06(f) or counted towards the Cumulative Growth Amount), in each case to employees, directors, officers, members of management or consultants of any Borrower (or any direct or indirect parent thereofof OSI) permitted or of its Subsidiaries that occurs after the Closing Date plus (2) the net cash proceeds of key man life insurance policies received by Section 7.06 in an the Company or any of its Subsidiaries after the Closing Date less (y) the aggregate amount not of all cash payments made in respect of any promissory notes pursuant to exceed $20,000,000 at any one time outstandingthis Section 7.03(i) after the Closing Date with the net cash proceeds described in preceding clause (x) (2) less (z) the aggregate amount of all Restricted Payments made after the Closing Date in reliance on the last proviso appearing in Section 7.06(f), and (B) issued by Employment Participation Subsidiaries to current or former restaurant employees, and development partners of Employment Participation Subsidiaries as consideration in respect of repurchases, redemptions or acquisitions of Equity Interests in Employment Participation Subsidiaries permitted under Section 7.06(i) in the ordinary course of business and consistent with past practice;
(kj) Indebtedness incurred by the Parent Borrower Borrowers or any of its Restricted their respective Subsidiaries in a Permitted Acquisition, any other Investment expressly permitted hereunder or any Disposition, in each any such case to the extent solely constituting indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;
(lk) Indebtedness consisting of obligations of the Parent Borrower Company or any of its Restricted Subsidiaries under deferred compensation or other similar arrangements incurred by such Person in connection with the Transaction and Permitted Acquisitions or any other Investment expressly permitted hereunder;
(ml) Cash Management Obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections and similar arrangements in each case incurred in connection with deposit accounts;
(m) Indebtedness of the ordinary courseCompany and its Subsidiaries in an aggregate principal amount not to exceed the greater of (i) $200,000,000 and (ii) 6.0% of Total Assets at any time outstanding;
(n) Indebtedness consisting of (a) the financing of insurance premiums or (b) take or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(o) Indebtedness incurred by the Parent Borrower Company or any of its Restricted Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts acceptances or similar instruments issued or created in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims; provided that any reimbursement obligations in respect thereof are reimbursed within 30 days following the incurrence thereof;
(p) obligations in respect of performance, bid, stay, custom, appeal and surety bonds and other obligations of a like nature and performance and completion guarantees and similar obligations provided by the Parent any Borrower or any of its Restricted Subsidiaries or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business or consistent with past practice;practices; 225989119_4
(q) Indebtedness of the Borrowers and their respective Subsidiaries supported by a Letter of Credit Credit, in a principal amount not to exceed the face amount of such Letter of Credit;
(r) (i) other unsecured or junior lien Indebtedness of the Parent Borrower or any Restricted Subsidiary Borrowers and their respective Subsidiaries in the form of letters of credit, in an aggregate outstanding principal amount not to exceed (A) $1,000,000,000 at the time of any incurrence pursuant to this clause (A) (when aggregated with the amount of Permitted Refinancings in respect of Indebtedness originally incurred pursuant to this clause (A) that are consummated in reliance on Section 7.03(r)(ii) below) plus (B) unlimited additional unsecured or junior lien Indebtedness, so long as either (x) the Total Leverage Ratio (calculated on a Pro Forma Basis) as of the end of the most recent Test Period is not greater than 7.00:1.00 or (y) the Fixed Charge Coverage Ratio (calculated on a Pro Forma Basis) for the end of the most recent Test Period is not less than 2.00:1.00; provided further that, in the case of any Indebtedness incurred under this clause (r), (1) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date of the Term B Loans or have a Weighted Average Life to Maturity less than the Weighted Average Life to Maturity of the Term B Loans plus 91 days, (2) such Indebtedness shall not have mandatory prepayment, redemption or offer to purchase events more onerous than those applicable to the Term B Loans, (3) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms and conditions at the time of incurrence or issuance of such Indebtedness and (4) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (r) and Section 7.03(v) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding and (ii) any Permitted Refinancing thereof50,000,000;
(s) Indebtedness incurred by of any Borrower in respect of one or more series of senior secured first lien notes or unsecured term loans or notes that are issued in a Non-Loan Partypublic offering, and guarantees thereof by Non-Loan PartyRule 144A or other private placement, or a bridge financing in an aggregate principal amount not to exceed lieu of the foregoing that otherwise converts into permanent Incremental Equivalent Debt (A) $600,000,000 at any one time outstanding plus (B) additional Indebtedness incurred from time to time as defined below), that are issued or made in lieu of Incremental Term Commitments pursuant to asset based revolving facilities provided by commercial banks an indenture or similar financial institutions; provided that a note purchase agreement or otherwise (1) such Indebtedness is secured by Liens on the current assets of Restricted Subsidiaries that are not Loan Parties (and not on the Collateral), (2) Loan Parties shall not Guarantee such Indebtedness unless such Guarantee would otherwise be permitted under Section 7.02, and (3) borrowings under such asset based revolving facilities shall be subject to a borrowing base or similar advance rate criteria;
(i) Indebtedness (in the form of senior secured, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by the Borrowers to the extent that the Borrowers shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14; provided that (A) such Indebtedness shall not mature earlier than the Maturity Date applicable to the Term B Loans, (B) as of the date of the incurrence of such Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than that of the Term B Loans, (C) no Restricted Subsidiary is a borrower or guarantor with respect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, (D) the other terms and conditions of such Indebtedness (excluding pricing and optional prepayment or redemption terms) reflect market terms on the date of issuance, (E) if such Indebtedness is in the form of a term loan facility of the Loan Parties and is secured by a Lien on the Collateral that is pari passu with the Lien securing the Obligations, the terms set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an “Incremental Term Loan and (F) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C), (D) and (E) (such Indebtedness incurred pursuant to this clause (t) being referred to as “Permitted Alternative Incremental Facilities Equivalent Debt”) and (ii) any Permitted Refinancing thereof;
(u) additional Indebtedness in an aggregate principal amount not to exceed the greater of (x) $500,000,000 and (y) 30.0% of Consolidated EBITDA of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(v) Indebtedness incurred to finance or assumed in connection with a Permitted Acquisition, ); provided that (i) the aggregate principal amount of all Incremental Equivalent Debt issued pursuant to this Section 7.03(s) shall not, together with all Revolving Commitment Increases and/or Incremental Term Commitments incurred after giving Pro Forma Effect to the Closing Date, exceed the Available Incremental Amount (provided that, if such Permitted Acquisition and such IndebtednessIncremental Equivalent Debt is unsecured, the Total Leverage Ratio incurrence of any such Indebtedness pursuant to clause (calculated on a Pro Forma BasisB) as of the most recent Test Period is either (x) not greater than 7.00:1.00 or (y) not greater than the Total Leverage Ratio immediately prior definition of Available Incremental Amount shall be subject to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness, (ii) if such Indebtedness is secured by a Lien on the Collateral that is pari passu Company’s compliance with the Lien securing the Obligations, (A) after giving Pro Forma Effect to such Permitted Acquisition and such secured Indebtedness, the First Lien Senior Secured Leverage Ratio (calculated on a Pro Forma Basis) Financial Covenants as of the last day of the Test Period most recently ended Test Period is either for which financial statements have been delivered to the Lenders under Section 6.01(a) and (x) not greater than 4.00:1.00 or (y) not greater than b), after giving effect to such incurrence on a Pro Forma Basis, in lieu of the First Lien Senior Consolidated Secured Net Leverage Ratio immediately prior to the consummation of such Permitted Acquisition and the incurrence or assumption of such Indebtedness and (B) if such Indebtedness is a term loan facility of the Loan Parties, the Parent Borrower shall have been permitted to incur such Indebtedness pursuant to, and such Indebtedness shall be deemed to be incurred in reliance on, Section 2.14, and the terms test set forth in the proviso to Section 2.14(b)(ii) shall have been complied with as if such Indebtedness was considered an Incremental Term Loan (such Indebtedness incurred pursuant to this clause (B)), (ii) being referred no Default shall have occurred and be continuing or would exist immediately after giving effect to as “Permitted Credit Facilities Acquisition Debt”) and such incurrence, (iii) the maximum aggregate principal amount of Indebtedness that may be incurred pursuant to this clause (v) and Section 7.03(r) by Non-Loan Parties shall not exceed the greater of (x) $400,000,000 and (y) 25.0% of Consolidated EBITDA as of the Parent Borrower for the most recently ended Test Period at any one time outstanding;
(i) Indebtedness (in the form date of senior secureddetermination, senior unsecured, senior subordinated, or subordinated notes or loans) incurred by a Borrower to the extent that 100% of the Net Cash Proceeds therefrom are, immediately after the receipt thereof, applied solely to the prepayment of Term Loans in accordance with Section 2.05(b)(iii); provided that (A) such Indebtedness Incremental Equivalent Debt shall not mature earlier than the Maturity Date with respect to the relevant Term Loans being refinanced, (B) and Commitments in effect as of the effective date of such Incremental Equivalent Debt (prior to giving effect to any extensions thereof occurring after the incurrence Maturity Date), (iv) the documentation with respect to such Incremental Equivalent Debt contains no mandatory prepayment, repurchase or redemption provisions prior to the Latest Maturity Date then in effect except with respect to change of control, asset sale and casualty event mandatory offers to purchase and customary acceleration rights after an event of default that are customary for financings of such type, (v) such Incremental Equivalent Debt may participate on a pro rata basis or less than pro rata basis (but not on a greater than pro rata basis (other than pursuant to asset sale and change of control provisions customary for high-yield debt securities)) in any voluntary or mandatory prepayments hereunder, as specified in the applicable Incremental Amendment, (vi) such Incremental Equivalent Debt shall not be subject to any Guarantee by any Person other than a Loan Party, (vii) if such Incremental Equivalent Debt is secured, the obligations in respect thereof shall not be secured by any Lien on any asset of the Company or any Subsidiary other than any asset constituting Collateral, (viii) if such Incremental Equivalent Debt is secured, the security agreements relating to such Incremental Equivalent Debt shall be substantially the same as the Collateral Documents (with such differences as are reasonably satisfactory to the Administrative Agent), (ix) if such Incremental Equivalent Debt is secured on a pari passu basis with the Obligations, then such Incremental Equivalent Debt shall be subject to a First Lien Intercreditor Agreement, and (x) the documentation with respect to any Incremental Equivalent Debt shall contain terms and conditions not materially more restrictive (taken as a whole) in respect of the Company and its Subsidiaries than those set forth in this Agreement;
(t) Credit Agreement Refinancing Indebtedness;
(u) unsecured Indebtedness of the Company or any Subsidiary in an aggregate principal amount not to exceed the amount of Net Cash Proceeds of issuances of, or contributions in respect of, Equity Interests of the Company (other than proceeds of issuances of Disqualified Equity Interests) after the Closing Date to the extent that such Net Cash Proceeds shall have been 225989119_4 actually received by OSI (through a capital contribution of such Net Cash Proceeds by the Company to OSI) on or prior to such date of determination and to the extent not used to make payments under Section 7.03(i), make Investments pursuant to Section 7.02(t), make Restricted Payments pursuant to Section 7.06(f) or (h), or count towards the Cumulative Growth Amount; provided, (i) such Indebtedness will not mature prior to the date that is ninety-one (91) days after the then Latest Maturity Date at the time of the issuance of such Indebtedness, (ii) such Indebtedness will not have mandatory prepayment or mandatory amortization, redemption, sinking fund or similar prepayments prior to the Weighted Average Life to date that is ninety-one (91) days after the then Latest Maturity Date at the time of the issuance of such Indebtedness shall not be shorter than that of then-remaining Term Loans being refinancedIndebtedness, (Ciii) no Restricted Subsidiary is a borrower Default shall have occurred and be continuing or guarantor with respect would exist immediately after giving effect to such Indebtedness unless such Restricted Subsidiary is a Subsidiary Guarantor which shall have previously or substantially concurrently guaranteed the Obligations, incurrence and (Div) the terms and conditions of such Indebtedness shall be not materially more restrictive (excluding pricing and optional prepayment or redemption terms or covenants or other provisions applicable only to periods after the maturity date taken as a whole) in respect of the Term Loans being refinanced) reflect market terms Company and conditions on the date of issuance and such Indebtedness shall not participate its Subsidiaries than those set forth in mandatory prepayments on a greater than pro rata basis with the Term Loans and (E) the Parent Borrower has delivered to the Administrative Agent a certificate of a Responsible Officer of the Parent Borrower, together with all relevant financial information reasonably requested by the Administrative Agent, including reasonably detailed calculations demonstrating compliance with clauses (A), (B), (C) and (D) and (ii) any Permitted Refinancing thereofthis Agreement;
(xv) Indebtedness with respect of Foreign Subsidiaries in an aggregate principal amount not to exceed $100,000,000 at any Permitted Receivables Financingtime outstanding;
(y) Indebtedness in respect of Permitted Debt Exchange Notes incurred pursuant to a Permitted Debt Exchange in accordance with Section 2.17 and any Permitted Refinancing thereof; and
(zw) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (v) above;
(x) so long as no Default exists or would result therefrom, Permitted Ratio Debt and Permitted Refinancings thereof;
(y) above. For purposes of determining compliance with this Section 7.03, in the event that an item of any Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (a) through pursuant to any Permitted Convertible Notes Call Transaction; and
(z) above, the Parent Borrower shall, in its sole discretion, classify and reclassify or later divide, classify or reclassify such item of unsecured Indebtedness (or any portion thereof) and will only be required to include the amount and type of such Indebtedness in one or more of the above clauses; provided that all Indebtedness outstanding under the Loan Documents will 2029 Senior Notes in an aggregate outstanding principal amount not to exceed $500,000,000 at any time, which Indebtedness may be deemed to have been incurred in reliance only guaranteed on the exception in clause (a) of this Section 7.03 and the Senior Secured Notes will be deemed to have been incurred in reliance only on the exception set forth in clause (c) of this Section 7.03. The accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness shall not be deemed to be an incurrence of Indebtedness for purposes of this Section 7.03.unsecured bas
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