Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except: (a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans); (b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note); (c) [reserved]; (d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement; (e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items; (f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs; (i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business; (h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06; (i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01; (j) Surety Bond Indebtedness; (k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business; (l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business; (m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period; (n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period; (o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a); (p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time, (iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)), (iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness, (v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and (vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii); (q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”): (i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00; (ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or (iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00; (iv) provided, that: (A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and (B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof: (C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof; (D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and (E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 3 contracts
Sources: Credit Agreement (SOLV Energy, Inc.), Credit Agreement (SOLV Energy, Inc.), Credit Agreement (SOLV Energy, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, exceptIndebtedness other than the following:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Obligations;
(b) Mortgage Indebtedness as of the Borrower to date hereof and listed on Schedule 5.07(b), any Subsidiary and/or of renewals, amendments, modifications or extensions thereof that do not increase the principal amount thereof, and any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Permitted Refinancings thereof;
(c) [reserved]Monthly payment, installment or financing plans for the payment of insurance policy premiums;
(d) Indebtedness arising from (i) any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Investment or Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guarantiescomprising guarantees, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance pursuant to such agreement, or (ii) any Mortgage Indebtedness incurred to finance, or assumed in connection with, an acquisition or Investment in a Hotel Property (or part of a Hotel Property) or the direct or indirect Equity Interests of any Person that owns a Hotel Property, not to exceed 70% of the Borrower fair market value (determined as of the date of entry into the agreement for such acquisition or Investment) of such Hotel Property (or part of a Hotel Property) and any Subsidiary pursuant to any such agreementPermitted Refinancings thereof;
(e) Indebtedness of the Borrower a Loan Party to any other Loan Party and/or any Subsidiary or Controlled JV Subsidiary, and Indebtedness of a Subsidiary or Controlled JV Subsidiary to any other Subsidiary or Controlled JV Subsidiary and/or any Loan Party; provided that any such Indebtedness of a Loan Party to a Subsidiary or Controlled JV Subsidiary that is not a Loan Party shall be contractually subordinated in right of payment to the prior repayment in full of the Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of Banking Services;
(g) trade payables and similar current obligations to a trade creditor incurred in the ordinary course of business and not evidenced by a note;
(h) Indebtedness incurred by a Loan Party or any of its Subsidiaries or Controlled JV Subsidiaries in respect of letters of credit, bank guarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created, or relating to obligations or liability 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;
(i) pursuant Indebtedness (including Capitalized Lease Obligations) incurred by (i) any Subsidiary or Consolidated JV Subsidiary of the Borrower that is not a Loan Party in the ordinary course of business not more than 180 days before or after the 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 Subsidiary or Controlled JV Subsidiary, in order to tendersfinance such acquisition, statutory obligationsconstruction, bidsrepair, leasesreplacement, governmental contractslease, trade contractsexpansion, suretydevelopment, stayinstallation, customsrelocation, appealrenewal, performance and/or return maintenance, upgrade or improvement of money bonds such fixed or capital asset; provided that any Indebtedness incurred under this Section 7.02(i)(i) shall be without recourse to any Loan Parties and (ii) any Loan Party in an aggregate amount at any time not to exceed $10,000,000, incurred in the ordinary course of business not more than 180 days before or after the acquisition, construction, repair, replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of a fixed or capital asset incurred by a Loan Party, Borrower or any Subsidiary or Controlled JV Subsidiary, in order to finance such acquisition, construction, repair, replacement, lease, expansion, development, installation, relocation, renewal, maintenance, upgrade or improvement of such fixed or capital asset;
(j) Indebtedness in respect of Swap Contracts designed to hedge against the Borrower’s or any 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;
(k) Indebtedness incurred under the ERF Program in an aggregate amount at any time not to exceed $100,000,000 (or such other similar obligations incurred increased amount as may be approved by the Required Lenders);
(l) without duplication of any other Indebtedness, all premiums (if any), interest (including post-petition interest and payment in kind interest), accretion or amortization of original issue discount, fees, expenses and charges with respect to Indebtedness of the Loan Parties and their respective Subsidiaries and Controlled JV Subsidiaries permitted hereunder;
(m) (i) Guarantees by a Loan Party of Indebtedness of Property-Level Subsidiaries to the extent consisting of Guarantees that do not provide any greater recourse to the applicable Loan Party than the Mortgage Recourse Carve-Outs; provided that such Guarantees are entered into in the ordinary course of business and (ii) Guarantees by Controlled JV Subsidiaries or Subsidiaries that do not constitute Loan Parties in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsIndebtedness otherwise permitted hereunder;
(fn) Indebtedness representing deferred compensation to current or former directors, officers, employees, members of management, managers, and consultants of the Borrower Loan Parties and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management their respective Subsidiaries and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees Controlled JV Subsidiaries in the ordinary course of business, ; and
(iio) Indebtedness incurred in the ordinary course of business in respect of obligations under performance, surety, statutory and appeal bonds. In furtherance of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect theretoforegoing, no Event of Default existsProperty-Level Subsidiary shall create, and
(vi) in the case of Replacement Debtincur, (A) such Indebtedness is pari passu assume or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect suffer to the remaining Obligations hereunder, or is unsecured; provided, that exist any such Refinancing Indebtedness that is pari passu or junior with respect recourse to the Collateral shall be subject to an Acceptable Intercreditor Agreementany Loan Party, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any thenMortgage Recourse Carve-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofOuts.
Appears in 3 contracts
Sources: Credit Agreement (Ashford Hospitality Trust Inc), Credit Agreement (Ashford Hospitality Trust Inc), Credit Agreement (Ashford Hospitality Trust Inc)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) the Secured Obligations Existing Notes, (including any Additional Term Loans ii) [reserved] and (iii) other Indebtedness existing on the Closing Date and set forth on Schedule 6.01 (excluding Indebtedness under clause (b) of this Section 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Subsidiary of the Borrower);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]Indebtedness of the Borrower and its Relevant Subsidiaries pursuant to Swap Agreements permitted by Section 6.13;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Relevant Subsidiary of the Borrower, pursuant to any reimbursement or indemnification obligations to such agreementPerson in the ordinary course of business;
(e) Indebtedness of the Borrower and/or or any Relevant Subsidiary owing to the Borrower or any Subsidiary of the Borrower to the extent permitted by Section 6.04, provided that Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party (ithe “Subordinated Intercompany Debt”) pursuant shall be subordinated to tendersthe Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of performance bonds, statutory warranty bonds, bid bonds, appeal bonds, surety bonds, labor bonds and completion or performance guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) in respect Indebtedness arising out of letters of creditadvances on exports, bank guarantiesadvances on imports, surety bondsadvances on trade receivables, performance bonds or customer prepayments and similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into transactions in the ordinary course of business;
(hg) Guarantees Indebtedness arising from the honoring by the Borrower and/or any Subsidiary of Indebtedness a bank or other obligations financial institution of a check, draft or similar instrument drawn against insufficient funds in the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, ordinary course of business or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that cash management services in the case ordinary course of any Guarantee by the Borrower business, provided that (x) such Indebtedness (other than credit or purchase cards) is extinguished within five Business Days of the obligations its incurrence and (y) such Indebtedness in respect of any Subsidiary of the Borrower credit or of any joint venture, the related Investment purchase cards is permitted under Section 6.06extinguished within 60 days from its incurrence;
(i) Indebtedness of a Relevant Subsidiary acquired after the Closing Date or a Person merged into, amalgamated or consolidated with the Borrower and/or or any Relevant Subsidiary existingafter the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger, amalgamation or consolidation and is not created in contemplation of such event and where such acquisition, merger, amalgamation or consolidation is permitted by this Agreement, provided that the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger, amalgamation or consolidation, such assumption or such incurrence, as applicable (together with Indebtedness outstanding pursuant to commitments existingthis paragraph (h), on paragraph (i) of this Section 6.01 and the Closing Date; providedRemaining Present Value of outstanding leases permitted under Section 6.03), that would not exceed the greater of $125.0 million and 2.0 % of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition, merger, amalgamation or consolidation, such assumption or such incurrence, as applicable, for which financial statements have been delivered pursuant to Section 5.04 and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Borrower or any Relevant Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition, lease or improvement, and any Permitted Refinancing Indebtedness in excess respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (h) of this Section 6.01, this paragraph (i) and the Remaining Present Value of leases permitted under Section 6.03) would not exceed the greater of $5,000,000 shall be described on Schedule 6.01125.0 million and 2.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(j) Surety Bond IndebtednessCapital Lease Obligations incurred by the Borrower or any Relevant Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) Indebtedness other Indebtedness, in an aggregate principal amount at any time outstanding pursuant to this Section 6.01(k) not in excess of the Borrower and/or any Subsidiary consisting greater of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course $100.0 million and 1.5 % of businessConsolidated Total Assets;
(l) Guarantees (i) by any Loan Party or any other Relevant Subsidiary of any Indebtedness of the Borrower and/or or any other Loan Party expressly permitted to be incurred under this Agreement; provided, that a Relevant Subsidiary consisting that is not a Loan Party shall not be permitted to Guarantee Indebtedness of a Loan Party pursuant to this sub-clause (i) the financing of insurance premiumsunless such Relevant Subsidiary becomes (and remains) a Guarantor hereunder while such Guarantee is outstanding, (ii) take-or-pay obligations contained in supply arrangementsby the Borrower or any Relevant Subsidiary of Indebtedness of any Subsidiary that is not a Loan Party to the extent permitted by Section 6.04, in each case, (iii) by any Relevant Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party and (iv) by the Borrower of Indebtedness of Foreign Subsidiaries incurred for working capital purposes in the ordinary course of business and/or on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(k) or (iiip); provided that Guarantees by any Loan Party under this Section 6.01(l) obligations of any other Indebtedness of a Person that is subordinated to reacquire assets other Indebtedness of such Person shall be expressly subordinated to the Obligations on terms consistent with those used, or inventory in connection with customer financing arrangements in the ordinary course of businessto be used, for Subordinated Intercompany Debt;
(m) Indebtedness arising from agreements of the Borrower and/or or any Relevant Subsidiary of the Borrower providing for indemnification, adjustment of purchase price, earn outs or similar obligations, in each case, incurred or assumed in connection with respect 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, assets or a Subsidiary for the purpose of financing such acquisition;
(n) Indebtedness supported by a Revolving Letter of Credit, in a principal amount not in excess of the stated amount of such Revolving Letter of Credit;
(o) Indebtedness consisting of Permitted Junior Debt;
(p) Indebtedness of Relevant Subsidiaries that are Foreign Subsidiaries (including letters of credit or bank guarantees (other than Revolving Letters of Credit issued pursuant to Capital Leases and purchase money Indebtedness Section 2.05) for working capital purposes incurred in the ordinary course of business on ordinary business terms in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 25.0 million and 350.5% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodTotal Assets outstanding at any time);
(ni) Indebtedness of any Person that becomes a Subsidiary or Indebtedness incurred and/or assumed in connection with any acquisition Section 6.04(j) or similar Investment permitted hereunder after the Closing Date6.04(q); provided, provided that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does outstanding pursuant to this Section 6.01(q) shall not exceed the greater of $20,000,000 150.0 million and 252.5% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;Total Assets and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; and
(or) Indebtedness consisting of promissory notes issued by the Borrower all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses contingent interest on obligations described in paragraphs (a)) through (q) above. For purposes of determining compliance with this Section 6.01, (i), ) in the event that an item of Indebtedness (j), (m), (n), (q), (r), (u), (w), (y), (z), (bbor any portion thereof) and/or (ff) meets the criteria of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the principal amount of such Indebtedness does not exceed the principal amount more than one of the Indebtedness being refinanced, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect categories of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in Borrower or a Relevant Subsidiary, as the case of Refinancing Indebtedness incurred may be, in respect of Indebtedness permitted under clause (a) of this Section 6.01its sole discretion, (A) such Indebtednessmay classify, if secured, is secured only by Permitted Liens at the time of incurrence, such refinancing, refunding item of Indebtedness (or replacement (it being understood that secured Indebtedness may any portion thereof) in any such category and will only be refinanced with unsecured Indebtedness), and if the Liens securing required to include such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1or any portion thereof) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect one of the categories of Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to in this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, 6.01; and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on at the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basistime of incurrence, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecuredBorrower or a Relevant Subsidiary, either (1) as the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) providedcase may be, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtednessin its sole discretion, and
(B) if such Incurred Acquisition Debt consists may divide and classify an item of Indebtedness for borrowed money (or Indebtedness any portion thereof) in more than one of the kind described categories of Indebtedness permitted in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofthis Section 6.01.
Appears in 3 contracts
Sources: Amendment (Crestwood Equity Partners LP), Credit Agreement (Crestwood Midstream Partners LP), Credit Agreement (Crestwood Equity Partners LP)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness in respect thereof (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness in respect of self-insurance and Indebtedness and other obligations owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry norm;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary (i) and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to tendersthis Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit J hereto or on substantially identical subordination terms or other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry norm, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry norm;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in each case incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash other cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness services incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of businessindustry norm;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 3 contracts
Sources: Credit Agreement (United Parks & Resorts Inc.), Credit Agreement (United Parks & Resorts Inc.), Credit Agreement (SeaWorld Entertainment, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (x) Indebtedness (other than as described in Section 6.01(b) below) existing or committed on the Secured Obligations Effective Date (including provided, that any Additional Term Loans such Indebtedness that is owed to any person other than the Borrower and/or one or more of its Subsidiaries, in an aggregate amount in excess of $5,000,000 shall be set forth in Schedule 6.01) and (y) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided, that any Indebtedness outstanding pursuant to this clause (a) which is owed by a Loan Party to any subsidiary of the Borrower that is not a Loan Party shall be subordinated in right of payment to the same extent required pursuant to Section 6.01(e);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21, Section 2.22 and Section 2.23) and under the other Loan Documents and any Refinancing Notes incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to any Subsidiary (i) and of any Subsidiary to the Borrower or any other Subsidiary; provided, that Indebtedness owed by any Loan Party to any Subsidiary that is not a Guarantor incurred pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or this Section 6.01(e) (other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness than intercompany current liabilities incurred in the ordinary course of business in respect of obligations connection with the cash management, tax and accounting operations of the Borrower and/or any Subsidiary and the Subsidiaries) shall be subordinated in right of payment to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and Loan Obligations under this Agreement on terms reasonably satisfactory to the Administrative Agent;
(iiif) Indebtedness in respect of letters performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case provided in the ordinary course of creditbusiness or consistent with past practice or industry practices, bankers’ acceptancesincluding those incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank guaranties or other financial institution of a check, draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 3 contracts
Sources: Credit Agreement (Enhabit, Inc.), Credit Agreement (Enhabit, Inc.), Credit Agreement (Encompass Health Corp)
Indebtedness. The Borrower shall notNo Loan Party will, nor shall will it permit any of its Subsidiaries Subsidiary to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Obligations;
(b) Indebtedness of existing on the Borrower to any Subsidiary and/or of any Subsidiary to Petition Date, including the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Prepetition Secured Obligations;
(c) [reserved]Guarantees by any Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of any Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by any Borrower or any other Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this clause (c) shall be subordinated to the Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;
(d) Indebtedness arising from owed to any agreement Person providing for indemnificationworkers’ compensation, adjustment of purchase price health, disability or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunderother employee benefits or property, any acquisition permitted hereunder casualty or consummated prior to the Closing Date or any other purchase of assets or Capital Stockliability insurance, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any reimbursement or indemnification obligations to such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (i) pursuant to tendersPerson, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations in each case incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(ie) Indebtedness of the Borrower and/or any Subsidiary existingLoan Party in respect of performance bonds, or pursuant to commitments existingbid bonds, on the Closing Date; providedappeal bonds, that any such Indebtedness surety bonds and similar obligations, in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into each case provided in the ordinary course of business;
(lf) obligations under any agreement governing the provision of treasury or cash management services, including deposit accounts, overnight draft, credit cards, debit cards, p-cards (including purchasing cards and commercial cards), funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services; and
(g) other Indebtedness in an aggregate principal amount not exceeding $100,000 at any time outstanding. Notwithstanding the foregoing, and except for the Carve-Out as provided in the DIP Orders, no Indebtedness permitted under this Section 6.01 shall have an administrative expense claim status under the Bankruptcy Code that is senior to or pari passu with (x) the DIP Superpriority Claims or (y) the superpriority administrative expense claims of the Borrower and/or any Subsidiary consisting of (i) Prepetition Administrative Agent and the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangementsPrepetition Secured Parties, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) herein and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofDIP Orders.
Appears in 2 contracts
Sources: Term Loan Credit Agreement (Bed Bath & Beyond Inc), Senior Secured Super Priority Debtor in Possession Term Loan Credit Agreement
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (x) Indebtedness (other than as described in Section 6.01(b) below) existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness for borrowed money that is owed to any person other than the Borrower and/or one or more of its Subsidiaries, in an aggregate amount in excess of $5,000,000 shall be set forth in Schedule 6.01) and (y) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided, that any Indebtedness outstanding pursuant to this clause (a) which is owed by a Loan Party to any Subsidiary that is not a Loan Party shall be subordinated in right of payment to the same extent required pursuant to Section 6.01(e);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21, Section 2.22 and Section 2.23) and under the other Loan Documents and any Refinancing Notes incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements or any other swap, hedging or derivative arrangement in the ordinary course of business, in each case entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to any Subsidiary (i) and of any Subsidiary to the Borrower or any other Subsidiary; provided, that Indebtedness owed by any Loan Party to any Subsidiary that is not a Guarantor incurred pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or this Section 6.01(e) (other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness than intercompany current liabilities incurred in the ordinary course of business in respect of obligations connection with the cash management, Tax and accounting operations of the Borrower and/or any Subsidiary and its Subsidiaries) shall be subordinated in right of payment to pay the deferred purchase price of goods or services or progress payments in connection with such goods Loan Obligations under this Agreement on terms reasonably satisfactory to the Administrative Agent (but only to the extent permitted by applicable law and services and not giving rise to material adverse Tax consequences);
(iiif) Indebtedness in respect of letters performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case provided in the ordinary course of creditbusiness or consistent with past practice or industry practices, bankers’ acceptancesincluding those incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank guaranties or other financial institution of a check, draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Credit Agreement (Westrock Coffee Co), Incremental Assumption Agreement and Amendment No. 1 (Westrock Coffee Co)
Indebtedness. The Borrower No Company shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume assume, or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness evidenced by this Agreement and the Secured Obligations other Loan Documents, and (including ii) Indebtedness of the Obligors evidenced by any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Permitted Refinancing Notes;
(b) the Indebtedness (i) described on Schedule 6.1 (to be updated on the Initial Funding Date, as applicable) or (ii) outstanding on the Signing Date not in excess of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that $1,000,000 in the case aggregate (when taken together with all other Indebtedness outstanding in reliance on this clause (b)(ii)), and any Refinancing Indebtedness in respect of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Indebtedness;
(c) [reserved]unsecured intercompany Indebtedness among any of the Companies permitted under Section 6.5;
(d) Indebtedness arising from consisting of Capital Lease Obligations and Indebtedness incurred to finance the acquisition, construction or improvement of any agreement providing for indemnificationasset, adjustment and any Refinancing Indebtedness in respect of such Indebtedness; provided that (i) such Indebtedness when incurred does not exceed the purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase cost of assets or Capital Stockconstruction of such asset, and (ii) the aggregate outstanding principal amount of Indebtedness arising from guaranties, letters permitted by this clause (d) does not exceed at any time the greater of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance (x) $50,000,000 and (y) 20.0% of the Borrower or any Subsidiary pursuant to any such agreementApplicable EBITDA;
(e) Indebtedness arising in connection with Hedging Agreements permitted by Section 6.13;
(f) Indebtedness incurred in the Ordinary Course of Business under surety and appeal bonds, performance bonds, bid bonds, appeal bonds and similar obligations;
(g) unsecured Indebtedness in respect of earn-outs, contingent liabilities in respect of any indemnification obligation, expense reimbursement obligations, adjustments of purchase price, or similar obligations owing to sellers of assets or Equity Interests to any Obligor or its Subsidiaries that are incurred in connection with the Borrower and/or consummation of one or more Permitted Acquisitions or other similar permitted Investments;
(h) Indebtedness incurred in the Ordinary Course of Business in respect of Cash Management Services and netting services, automatic clearinghouse arrangements, and other cash management and similar arrangements in the Ordinary Course of Business and any Subsidiary 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 Course of Business;
(i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return endorsements of money bonds instruments or other similar payment items for deposit;
(j) Subordinated Indebtedness in an aggregate principal amount not exceeding at any time the greater of (x) $50,000,000 and (y) 20.0% of Applicable EBITDA;
(k) Indebtedness under any Receivables Financing Facility in an aggregate Attributed Principal Amount not exceeding $350,000,000; provided that the Receivables Financier has executed and delivered the Receivables Intercreditor Agreement;
(l) other unsecured Indebtedness in an aggregate outstanding principal amount not exceeding at any time greater of (x) $50,000,000 and (y) 20.0% of Applicable EBITDA;
(m) Indebtedness consisting of (i) Guarantees arising with respect to customary indemnification obligations incurred to purchasers in the ordinary course of business connection with Dispositions permitted under Section 6.4 and (ii) Guarantees with respect to Indebtedness of any Company, to the extent that the Person that is obligated under such Guarantee could have incurred such underlying Indebtedness pursuant to this Agreement or it constitutes an Investment permitted under Section 6.5;
(n) Indebtedness incurred by any Obligor or any of their Subsidiaries in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ banker’s acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into instruments issued or created in the ordinary course Ordinary Course of businessBusiness, including in respect of workers’ compensation claims, employee severance and employment agreements, health, disability or other employee benefits or property, casualty or liability insurance, unemployment or other insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding workers compensation claims;
(ho) Guarantees by to the Borrower and/or any Subsidiary extent constituting Indebtedness, obligations in respect of Indebtedness or other completion guarantees, standby letters of credit and warranty and contractual service obligations of a like nature, trade letters of credit and documentary letters of credit and similar bonds or guarantees provided in the BorrowerOrdinary Course of Business in connection with the construction or build out of any owned or leased real property;
(p) to the extent constituting Indebtedness, any Subsidiary and/or any joint venture contingent obligations arising under indemnity agreements to title insurance companies to cause such title insurers to issue title insurance policies in the Ordinary Course of Business with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower real property of Borrowers or such Subsidiary, as applicable, or other obligations any of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06their Subsidiaries;
(iq) Indebtedness customer deposits and advance payments received in the Ordinary Course of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01Business from customers for goods purchased;
(jr) Surety Bond IndebtednessIndebtedness representing deferred compensation or similar arrangements to employees of any Borrower or any Subsidiary incurred in the Ordinary Course of Business;
(ks) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course Ordinary Course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessBusiness;
(mt) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness incurred by a non-Obligor in an aggregate outstanding principal amount not to exceed, at any time of the incurrence hereof, the greater of (x) $50,000,000 and (y) 20% of Applicable EBITDA;
(u) Indebtedness supported by a letter of credit (other than the Letters of Credit) in a principal amount not to exceed $5,000,000;
(v) Ratio Debt, so long as (i) immediately after giving effect to the greater incurrence of $52,850,000 such Ratio Debt and 35% the use of proceeds thereof (excluding for purposes of “cash netting” the proceeds of any such Ratio Debt), the Consolidated Adjusted EBITDA Net Leverage Ratio (calculated on a pro forma basis as of the last day end of the most recently ended Test Period;
recent Fiscal Quarter for which financial statements have been delivered (nor are required to be delivered) Indebtedness to the Lenders pursuant to Section 5.1(a) or 5.1(b)) is no greater than 0.50x less than that required pursuant to Section 7.1 as of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofmost recent Fiscal Quarter end, and (ii) the aggregate outstanding principal amount no Default or Event of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;Default then exists or would be caused thereby; and
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Membersw) to finance the purchase extent constituting Indebtedness, all premiums (if any), interest, fees, expenses, charges and additional or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under contingent interest on obligations described in clauses (a)) through (v) above. The accrual of interest, (i)the accretion of accreted value, (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) the amortization of 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 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of6.1.
Appears in 2 contracts
Sources: Credit Agreement (Kellogg Co), Credit Agreement (WK Kellogg Co)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(ai) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness in respect thereof (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(bi) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness in respect of self-insurance and Indebtedness and other obligations owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry norm;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary (i) and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to tendersthis Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit J hereto or on substantially identical subordination terms or other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry norm, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry norm;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in each case incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash other cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness services incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of businessindustry norm;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Credit Agreement (United Parks & Resorts Inc.), Credit Agreement (SeaWorld Entertainment, Inc.)
Indebtedness. The Borrower shall notCreate, nor shall it permit any of its Subsidiaries toincur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);other Loan Documents,
(b) Indebtedness of outstanding on the Borrower to any Subsidiary and/or of any Subsidiary to Closing Date and set forth on the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);Reporting Addendum,
(c) [reserved]intercompany loans and advances permitted by Section 7.11;
(d) Indebtedness arising from any agreement (including Guarantees) in respect of (i) performance, surety, bid, appeal or similar bonds, completion guarantees or similar instruments, including letters of credit and bankers acceptances (not incurred for the purpose of borrowing money), in each case provided in the ordinary course of business, (ii) Hedging Agreements entered into in the ordinary course of business as a risk management strategy and (iii) agreements providing for indemnification, adjustment of purchase price or similar obligations, or from guarantees or letters of credit, surety bonds or performance bonds securing any obligations (including contingent earn-out obligations) pursuant to such agreement, incurred in connection with the disposition of any Disposition permitted hereunderbusiness, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters Subsidiary of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementBorrower;
(e) Capital Lease Obligations and Indebtedness created, incurred or assumed in respect of the Borrower and/or any Subsidiary purchase, improvement, repair or construction of property, provided that such Indebtedness is created, incurred or assumed within 180 days after the earlier of (ix) the placement in service of such property or (y) the final payment on such property, and provided that the aggregate amount of the Indebtedness and created, incurred or assumed pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return this paragraph (e) at any time outstanding shall not exceed $500,000;
(f) Indebtedness incurred to pay premiums for insurance policies maintained by Borrower or any of money bonds or other similar obligations incurred its Subsidiaries in the ordinary course of business not exceeding in aggregate the amount of such unpaid premiums;
(g) Indebtedness of any Person acquired by Borrower or any of its Subsidiaries in an acquisition permitted by Section 7.11 (“Acquisition Indebtedness”) and assumed by Borrower or such Subsidiary pursuant to such acquisition, provided that (i) such Indebtedness was not incurred in contemplation of such acquisition, and (ii) such Indebtedness in respect of letters of credit, bank guaranties, surety bonds, performance bonds thereof shall not be secured by any assets other than some or similar instruments to support any all of the foregoing itemsassets securing the acquired Indebtedness prior to such acquisition;
(fh) refinancings, renewals, or extensions of Indebtedness permitted under clauses (b), (e) and (g) of this Section 7.1 (and continuance or renewal of any Permitted Liens associated therewith) so long as: (i) the terms and conditions of such refinancings, renewals, or extensions do not, in the Lender’s reasonable judgment, materially impair the prospects of repayment of the Borrower and/or Obligations by the Credit Parties or materially impair Borrower’s or any Subsidiary Credit Party’s creditworthiness, (ii) such refinancings, renewals, or extensions do not result in an increase in the principal amount of, or interest rate with respect to, the Indebtedness so refinanced, renewed, or extended or add one or more Credit Parties as liable with respect thereto if such additional Credit Parties were not liable with respect to the original Indebtedness, (iii) such refinancings, renewals, or extensions do not result in a shortening of Banking Services and/or otherwise the average weighted maturity of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions, that, taken as a whole, are materially more burdensome or restrictive to the applicable Credit Party, (iv) if the Indebtedness that is refinanced, renewed, or extended was subordinated in connection right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension Indebtedness must include subordination terms and conditions that are at least as favorable to the Lender as those that were applicable to the refinanced, renewed, or extended Indebtedness, and (v) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with Cash management and Deposit Accountsrespect to the Indebtedness that was refinanced, including incentiverenewed, supplier finance or similar programsextended;
(i) guaranties Guarantees with respect to bonds issued to support workers’ compensation, unemployment or other insurance or self-insurance obligations, and similar obligations, in each case, incurred by the Borrower and/or or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees its Subsidiaries in the ordinary course of business, ;
(iij) Indebtedness in the form of any earnout or other similar contingent payment obligation incurred in connection with an acquisition permitted hereunder;
(k) Indebtedness arising in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or netting services, overdraft protections, cash management services or progress payments and otherwise in connection with such goods deposit accounts;
(l) Guarantees (i) of Indebtedness otherwise permitted to be incurred hereunder or (ii) granted in the ordinary course of business of the obligations of suppliers, customers, franchisees and services and licensees of Borrower or any of its Subsidiaries;
(iiim) Indebtedness incurred by Excluded Subsidiaries to fund the origination or purchase of receivables or the purchase of goods to be held for lease, in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into either case in the ordinary course of business;; and
(hn) Guarantees by the Borrower and/or any Subsidiary Other Indebtedness of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations any of the Borrower its Subsidiaries in an aggregate face and/or principal amount at any Subsidiary time outstanding not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of1,000,000.
Appears in 2 contracts
Sources: Loan and Security Agreement (Atlanticus Holdings Corp), Loan and Security Agreement (Atlanticus Holdings Corp)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness created hereunder and under the Secured Obligations other Loan Documents and (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)ii) other Indebtedness existing on the Closing Date that is listed on Schedule 6.01;
(b) intercompany Indebtedness of Holdings and the Borrower to any Subsidiary and/or of any Subsidiary Restricted Subsidiaries to the Borrower and/or any other Subsidiaryextent permitted by Section 6.04(b); provided, provided that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such intercompany Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Obligations;
(c) [reserved];
(d) Indebtedness incurred by Holdings or any of the Restricted Subsidiaries arising from any agreement agreements providing for indemnification, adjustment of purchase price price, earnouts or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date from guaranties or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, bonds or performance bonds or similar instruments securing the performance of the Borrower Holdings or any such Restricted Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or permitted dispositions of any such agreementbusiness or assets of Holdings or any of the Restricted Subsidiaries;
(ed) Indebtedness of the Borrower and/or any Subsidiary (i) which may be deemed to exist pursuant to tendersany guaranties, statutory obligations, bids, leases, governmental contracts, trade contractsperformance, surety, staystatutory, customs, appeal, performance and/or return of money bonds appeal or other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(he) Guarantees by Indebtedness in respect of netting services, overdraft protections and otherwise in connection with deposit accounts;
(f) guaranties in the Borrower and/or ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of Holdings and the Restricted Subsidiaries;
(g) Indebtedness under the Revolving Credit Agreement and any Subsidiary Permitted Refinancing Indebtedness thereof; provided that the aggregate principal amount of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to under this Section 6.01 by the Borrower or such Subsidiary6.01(g) shall not exceed $300,000,000 (plus, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by such Permitted Refinancing Indebtedness, any fees, commissions and expenses, unpaid accrued interest and premium thereon and underwriting discounts and defeasance costs related to the Borrower incurrence thereof) at any time outstanding;
(h) Indebtedness owed to (including obligations in respect of letters of credit for the benefit of) any person providing worker’s compensation, health, disability or other employee benefits or property, casualty or liability insurance to Holdings or any Restricted Subsidiary, pursuant to reimbursement or indemnification obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06to such person;
(i) Indebtedness of Holdings or the Borrower and/or Restricted Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations and trade-related letters of credit, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business and any Subsidiary existingextension, renewal or pursuant refinancing thereof to commitments existing, on the Closing Date; provided, extent that any such the amount of refinancing Indebtedness in excess is not greater than the amount of $5,000,000 shall be described on Schedule 6.01Indebtedness being refinanced;
(j) Surety Bond IndebtednessIndebtedness 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 two Business Days of its incurrence;
(k) Indebtedness with respect to Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by any Restricted Subsidiary prior to or within 270 days after the acquisition or improvement of the Borrower and/or respective asset (whether through the direct purchase of such asset or the Equity Interest of any Subsidiary consisting of obligations owing person owning such asset) permitted under incentive this Agreement in order to finance such acquisition or improvement (including dealer incentiveany Indebtedness acquired in connection with a Permitted Acquisition); provided, any such Indebtedness (i) incurred by Restricted Subsidiaries that are not Loan Parties shall not exceed $10,000,000 in the aggregate at any time outstanding, (ii) shall be secured only by the assets acquired or improved in connection with the incurrence of such Indebtedness, and (iii) shall constitute not less than 75% of the aggregate consideration paid with respect to such asset, and any Indebtedness that Refinanced such Indebtedness pursuant to the definition of Permitted Refinancing Indebtedness (disregarding clause (v) thereof), supplyin an aggregate principal amount which, distributionwhen aggregated with the principal amount of all other Indebtedness then outstanding that was incurred pursuant to this clause (k), resale, vendor, license, sublicense or similar agreements entered into is not in the ordinary course excess of business$50,000,000 outstanding at any time;
(l) Indebtedness of any Restricted Subsidiary supported by a Letter of Credit in a principal amount not in excess of the Borrower and/or any Subsidiary consisting stated amount of (i) the financing such Letter of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessCredit;
(m) after the Exit Facility Conversion Date, (i) Indebtedness of a Restricted Subsidiary of Holdings acquired after the Borrower and/or any Closing Date and Indebtedness of a person merged or consolidated with or into a Restricted Subsidiary after the Closing Date and Indebtedness assumed in connection with respect to Capital Leases and purchase money the acquisition of assets, which Indebtedness in an each case exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and (ii) any Indebtedness that Refinanced such Indebtedness pursuant to the definition of Permitted Refinancing Indebtedness (disregarding clause (v) thereof); provided that (A) the aggregate outstanding principal amount of all Indebtedness under this clause (m) shall not at any time outstanding exceed $75,000,000 (plus, in the case of any such Permitted Refinancing Indebtedness, any fees, commissions and expenses, unpaid accrued interest and premium thereon and underwriting discounts and defeasance costs related to exceed the incurrence thereof) and (B) at the time of such acquisition and at the time of the incurrence or assumption of such Indebtedness by a Restricted Subsidiary, on a pro forma basis after giving effect thereto, no Default shall have occurred and be continuing and the Leverage Ratio as of such date shall be no greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA than the Leverage Ratio as of the last day of the most recently ended Test PeriodClosing Date;
(n) after the Exit Facility Conversion Date, Indebtedness of Restricted Subsidiaries of Holdings that are not Loan Parties in an aggregate amount at any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject outstanding not to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period50,000,000;
(o) after the Exit Facility Conversion Date, Permitted Subordinated Indebtedness and other junior Indebtedness in an aggregate principal amount not greater than $100,000,000 at any time outstanding; provided that, (i) both before and after giving effect to the incurrence of any such Indebtedness, on a pro forma basis, no Default shall have occurred and be continuing and the Leverage Ratio as of such date shall be no greater than the Leverage Ratio as of the Closing Date;
(p) [Intentionally Omitted];
(q) all premiums (if any), interest (including post-petition interest), fees, expenses, indemnities, charges and additional or contingent interest on obligations described in clauses (a) through (p) above;
(r) [Intentionally Omitted];
(s) Guarantees of obligations of third parties to the extent treated as Investments in such third parties (in an amount equal to the aggregate amount of the obligations so Guaranteed) and permitted by Section 6.04;
(t) Any Refinancing Facility or Refinancing Notes of a Loan Party incurred in accordance with Section 2.23;
(u) Indebtedness consisting of promissory notes Indebtedness issued by the Borrower or any Subsidiary Loan Party to any stockholder of any Parent Company or any future, current or former directorofficers, officermanagers, employeedirectors, member consultants and employees of managementHoldings, manager its subsidiaries or consultant of any Parent Companyits direct or indirect parent companies, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses, in each case to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company permitted by direct or indirect parent company of Holdings to the extent described in Section 6.04(a6.06(a)(i);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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, provided that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing such Indebtedness with an original a principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined $2,000,000 shall be approved by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date board of the debt then-being refinanced as directors of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),Holdings;
(ivv) in the case of Refinancing Indebtedness with respect to Indebtedness Hedging Agreements permitted under clauses (mSection 6.04(h), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), ; and
(w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Prepetition LC Facility (including Indebtedness being refinanced, refunded or replaced, except constituting reimbursement obligations thereunder) with respect to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect letters of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) credit outstanding thereunder as of the date of the incurrence of such Indebtedness and after giving effect theretoExit Facility Conversion Date, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal aggregate amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of$27,000,000.
Appears in 2 contracts
Sources: Superpriority Senior Secured Debtor in Possession and Exit Term Loan Credit Agreement (HMH Holdings (Delaware), Inc.), Superpriority Senior Secured Debtor in Possession and Exit Term Loan Credit Agreement (HMH Holdings (Delaware), Inc.)
Indebtedness. The Borrower shall will not, nor shall will it permit any of its Subsidiaries Subsidiary to, directly or indirectly, create, incur, assume incur or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(ai) the Secured Obligations (including any Additional Term The Loans and any Additional Opco Revolving Facility Repayment Term Loans);the Reimbursement Obligations.
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred existing on the date hereof and described in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and Disclosure Schedule.
(iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;arising under Rate Management Transactions permitted by Section 7.11.
(hiv) Guarantees Contingent Obligations permitted by the Borrower and/or any Subsidiary Section 7.10.
(v) Non-recourse Indebtedness as to which none of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiaryits Subsidiaries (i) provides any guaranty or credit support of any kind (including any undertaking, guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (ii) is directly or indirectly liable (as applicable, a guarantor or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiaryotherwise); provided, that after giving effect to such Indebtedness outstanding from time to time, Borrower is not in the case violation of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;Article VIII.
(ivi) Indebtedness of Borrower in respect of guarantee obligations of Cimarex Energy Services, Inc., an Oklahoma corporation, which do not in the Borrower and/or aggregate exceed $75,000,000 at any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;one time outstanding.
(j) Surety Bond Indebtedness;
(kvii) Indebtedness of evidenced by the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofSenior Notes, and (ii) the aggregate outstanding principal amount guarantee obligations of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness Subsidiaries in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) guarantee obligations exist as of the date hereof, are required by the terms of the incurrence of such Indebtedness Indentures, or are otherwise on terms and after giving effect thereto, no Event of Default exists, andconditions satisfactory to the Administrative Agent in its sole reasonable discretion.
(viviii) Permitted Bond Indebtedness, and guarantee obligations of Subsidiaries of the Borrower in the case of Replacement Debtrespect thereof, (A) provided, that, such Indebtedness is pari passu or junior in right of payment guarantee obligations are on terms and secured by the Collateral on a pari passu or junior basis with respect conditions satisfactory to the remaining Obligations hereunderAdministrative Agent, or is unsecured; in its sole reasonable discretion.
(ix) Indebtedness in respect of any 9.60% Senior Notes Refinancing, and guarantee obligations of Subsidiaries of the Borrower in respect thereof, provided, that any that, such Refinancing Indebtedness that is pari passu or junior with respect guarantee obligations are on terms and conditions satisfactory to the Collateral shall be subject to an Acceptable Intercreditor AgreementAdministrative Agent, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in its sole reasonable discretion.
(x) any voluntary prepayment of Term Loans as set forth in Financial Contracts permitted under Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);7.11.
(qxi) Miscellaneous items of Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date not described in an outstanding principal amount subsections (i) through (x) above which do not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and taking into account all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(Eits Subsidiaries) such Incurred Acquisition Debt (x) may rank pari passu with or junior to exceed $25,000,000 at any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofone time outstanding.
Appears in 2 contracts
Sources: Credit Agreement (Cimarex Energy Co), Credit Agreement (Cimarex Energy Co)
Indebtedness. The Borrower shall notIncur, nor shall it permit any of its Subsidiaries to, directly create or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided that any Additional Term Loans such item of Indebtedness that is individually in excess of $20,000,000 shall be set forth on Schedule 6.01) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21, 2.22 or 2.23) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementPerson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of among the Borrower and/or and any of its Subsidiaries; provided, that Indebtedness of any Loan Party to any Subsidiary (i) that is not a Loan Party shall be subordinated in right of payment to any Indebtedness otherwise incurred pursuant to tendersthis Section 6.01(e);
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry practices, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in the ordinary course of business or other cash management services, in each case incurred in the ordinary course of business business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a Person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition or other permitted Investment), where such acquisition, merger or consolidation is not prohibited by this Agreement and such assumed Indebtedness was not incurred in contemplation of such acquisition, merger or consolidation and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (i) Finance Lease Obligations, purchase money or mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(i), would not exceed sum of (1) the greater of (x) $200,000,000 and (y) 0.50 times EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period plus (2) an unlimited amount so long as the Net Secured Leverage Ratio (assuming all Indebtedness incurred pursuant to this Section 6.01(i) (including Indebtedness for which this clause (2) is being tested) or similar Indebtedness outstanding under Section 6.01(a), is secured by Collateral) on a Pro Forma Basis is not greater than 6.00:1.00, (ii) Finance Lease Obligations incurred by the Borrower or any Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of computer equipment (including servers), storage equipment, networking equipment and other equipment and similar assets related to the business of the Borrower and the Subsidiaries and any finance lease obligations not prohibited hereunder and (iii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) Finance Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction not prohibited by this Agreement, (ii) Finance Lease Obligations or other obligations or deferrals attributable to capital spending and (iii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) other Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k) or incurred in reliance on the Incremental Amount on reliance of the proviso below, would not exceed the greater of (x) $350,000,000 and (y) 0.88 times EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period (provided that, at the option of the Borrower, amounts available under this Section 6.01(k) may be reallocated to increase clause (i) of the “Incremental Amount”, which shall be deemed to be a utilization of this Section 6.01(k) (unless reallocated in accordance with the definition of “Incremental Amount”) and, to the extent secured, Section 6.02(ii)), and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of the Borrower or any Subsidiary (“Contribution Debt”) in an aggregate outstanding principal amount up to 200% of the amount of cash or Permitted Investments, or the fair market value (as determined by the Borrower in good faith) of other property contributed to or received by the Borrower after the Closing Date in respect of (x) the issuance or sale of its Qualified Equity Interests or Equity Interests of any Parent Entity to the extent contributed to the Borrower in cash, Permitted Equity or property other than cash (or, in each case, member loans on terms reasonably acceptable to the Administrative Agent) or (y) contributions to its Permitted Equity (or member loans on terms reasonably acceptable to the Administrative Agent) (in each case of clauses (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the Borrower or any of its Subsidiaries), in each case to the extent such capital contributions or other proceeds do not constitute Permitted Cure Securities and were not included in the calculation of the Cumulative Credit and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(m) Guarantees (including any co-issuance) by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower or any Subsidiary and/or any joint venture otherwise not prohibited to be incurred pursuant to this Section 6.01; provided that in the case of any such Guarantee by any Loan Party or Subsidiary of the obligations of any joint venture that is not a Subsidiary, the related investment is permitted under Section 6.04;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(o) Indebtedness in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds warehouse receipts or similar instruments issued to support any performance obligations and trade-related letters of credit (other than obligations in respect of other Indebtedness) in the foregoing itemsordinary course of business or consistent with past practice or industry practices;
(fp) [Reserved];
(i) Indebtedness of the Borrower and/or and its Subsidiaries secured by Liens on Collateral that are Other First Liens in aggregate outstanding principal amount at any Subsidiary in respect time outstanding not to exceed the sum of Banking Services and/or otherwise (A) the available capacity under the Incremental Starter Amount, plus (B) the available capacity under the Incremental Prepayment Amount, plus (C) an unlimited amount, so long as for purposes of this clause (C), immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than the greater of (I) 5.00 to 1.00 and (II) if such Indebtedness is incurred in connection with a Permitted Business Acquisition (including through a merger or consolidation) or an Investment, where such acquisition, merger, consolidation or Investment is not prohibited by this Agreement, the Net First Lien Leverage Ratio as of the most recently ended Test Period prior thereto; provided, that (x) the aggregate principal amount of Indebtedness outstanding under this clause (q)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(q)(i), Section 6.01(r)(i), Section 6.01(s)(i) and Section 6.01(z)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of (x) $200,000,000 and (y) 0.50 times EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any Indebtedness for borrowed money pursuant to this clause (q)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(r) (i) Indebtedness of the Borrower and its Subsidiaries secured by Liens on Collateral that are Junior Liens in aggregate outstanding principal amount at any time outstanding not to exceed the sum of (A) the available capacity under the Incremental Starter Amount, plus (B) the available capacity under the Incremental Prepayment Amount, plus (C) an unlimited amount, so long as for purposes of this clause (C), immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, either (A) the Net Secured Leverage Ratio on a Pro Forma Basis is not greater than the greater of (I) 5.50 to 1.00 and (II) if such Indebtedness is incurred in connection with a Permitted Business Acquisition (including through a merger or consolidation) or an Investment, where such acquisition, merger, consolidation or Investment is not prohibited by this Agreement, the Net Secured Leverage Ratio as of the most recently ended Test Period or (B) the Cash management Interest Coverage Ratio on a Pro Forma Basis is not less than the lesser of (I) 2.00 to 1.00 and Deposit Accounts(II) if such Indebtedness is incurred in connection with a Permitted Business Acquisition (including through a merger or consolidation) or an Investment, including incentivewhere such acquisition, supplier finance merger, consolidation or similar programsInvestment is not prohibited by this Agreement, the Cash Interest Coverage Ratio as of the most recently ended Test Period; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (r)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(q)(i), this Section 6.01(r)(i), Section 6.01(s)(i) and Section 6.01(z)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of (x) $200,000,000 and (y) 0.50 times EBITDA calculated on a Pro Forma Basis for the most recently ended Test Period and (y) the incurrence of any Indebtedness for borrowed money pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) guaranties Indebtedness of the Borrower and its Subsidiaries that is unsecured or secured by non-Collateral assets in aggregate outstanding principal amount at any time outstanding not to exceed the sum of (A) the available capacity under the Incremental Starter Amount, plus (B) the available capacity under the Incremental Prepayment Amount, plus (C) an unlimited amount, so long as for purposes of this clause (C), immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, either (A) the Net Total Leverage Ratio on a Pro Forma Basis is not greater than the greater of (I) 6.00 to 1.00 and (II) if such Indebtedness is incurred in connection with a Permitted Business Acquisition (including through a merger or consolidation) or an Investment, where such acquisition, merger, consolidation or Investment is not prohibited by this Agreement, the Net Total Leverage Ratio as of the most recently ended Test Period or (B) the Cash Interest Coverage Ratio on a Pro Forma Basis is not less than the lesser of (I) 2.00 to 1.00 and (II) if such Indebtedness is incurred in connection with a Permitted Business Acquisition (including through a merger or consolidation) or an Investment, where such acquisition, merger, consolidation or Investment is not prohibited by this Agreement, the Cash Interest Coverage Ratio as of the most recently ended Test Period; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (s)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(q)(i), Section 6.01(r)(i), this Section 6.01(s)(i) and Section 6.01(z)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of (x) $200,000,000 and (y) 0.50 times EBITDA calculated on a Pro Forma Basis for the most recently ended Test Period and (y) the incurrence of any Indebtedness for borrowed money pursuant to this clause (s)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the sum of (I) greater of (x) $200,000,000 and (y) 0.50 times EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (II) the sum of 90% of the face amount of such Subsidiaries’ accounts receivables plus 60% of the book value of such Subsidiaries’ inventory, plus 100% of such Subsidiaries’ cash and cash equivalents (determined in good faith by the Borrower and/or any Subsidiary and excluding cash and cash equivalents from the proceeds of the obligations incurrence of suppliers, distributors, resellers, customers, licensees Indebtedness) and sublicensees (i) any Permitted Refinancing Indebtedness in the ordinary course of business, respect thereof;
(iiu) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness services; provided that such obligations are incurred in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting connection with open accounts extended by suppliers on customary trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, terms in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory and not in connection with customer financing arrangements in the ordinary course borrowing of businessmoney or any Hedging Agreements;
(mv) Indebtedness representing deferred compensation to directors, officers, employees, consultants or independent contractors of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excludingor, to the extent applicablesuch work is done for the Borrower or the Subsidiaries, pricing, fees, premiums, rate floors, optional prepayment, redemption terms any direct or subordination terms and, with respect to Refinancing Indebtedness indirect Parent Entity thereof) incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofordi
Appears in 2 contracts
Sources: Revolving Facility Repricing Amendment (Alliance Laundry Holdings Inc.), Revolving Facility Repricing Amendment (Alliance Laundry Holdings Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date and set forth on Schedule 6.01 (including any Additional Term Loans excluding Indebtedness under clause (b) of this Section 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Restricted Subsidiary of the Borrower);
(b) Indebtedness created hereunder and under the other Loan Documents;
(c) Indebtedness of the Borrower and the Restricted Subsidiaries pursuant to Permitted Swap Agreements;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Subsidiary and/or of any Subsidiary Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower and/or or any Restricted Subsidiary of the Borrower, pursuant to reimbursement or indemnification obligations to such Person; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) unsecured Indebtedness of the Borrower or any Subsidiary Loan Party owing to any other Subsidiary; Loan Party (the “Subordinated Intercompany Debt”), provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; is not held, assigned, transferred, negotiated or pledged to any Person other than a Loan Party, and provided, further, that any such Indebtedness of the Borrower to any Subsidiary must for borrowed money shall be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable reasonably satisfactory to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Agent;
(c) [reserved];
(df) Indebtedness arising from any agreement providing for indemnificationin respect of performance bonds, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunderwarranty bonds, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stockbid bonds, and Indebtedness arising from guaranties, letters of credit, bank guarantiesappeal bonds, surety bonds, labor bonds and completion or performance bonds or guarantees and similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (i) pursuant to tenders, statutory obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) Indebtedness arising out of advances on exports, advances on imports, advances on trade receivables, customer prepayments and similar transactions in respect the ordinary course of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsbusiness and consistent with past practice;
(fg) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programs;
(i) guaranties by instrument drawn against insufficient funds in the Borrower and/or any Subsidiary ordinary course of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees business or other cash management services in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (Aother than credit or purchase cards) existed is extinguished within five Business Days of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its incurrence;
(i) Indebtedness of a Restricted Subsidiary acquired after the Closing Date or a Person merged into, amalgamated or consolidated with the Borrower or any Restricted Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such Person became a Subsidiary acquisition, merger, amalgamation or consolidation and is not created in contemplation of such event and where such acquisition, merger, amalgamation or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided, that the assets subject to aggregate principal amount of such Indebtedness were acquired outstanding at any time (together with Indebtedness outstanding pursuant to this paragraph (h) and paragraph (i) of this Section 6.01 and the Remaining Present Value of outstanding leases permitted under Section 6.03), shall not exceed the greater of (A) U.S.$50.0 million and (B) was 5.5% of Consolidated Total Assets;
(i) Capital Lease Obligations (including any Sale and Lease-Back Transaction that is permitted under Section 6.03) and Purchase Money Obligations to the extent that the aggregate total of all such Capital Lease Obligations and Purchase Money Obligations outstanding at any one time (together with Indebtedness outstanding pursuant to this paragraph (i) and paragraph (h) of this Section 6.01 and the Remaining Present Value of outstanding leases permitted under Section 6.03), shall not created exceed the greater of (A) U.S.$50.0 million and (B) 5.5% of Consolidated Total Assets;
(j) other secured junior Indebtedness of the Borrower or any Subsidiary Loan Party; provided, that (i) the Liens securing the Obligations shall be senior to the Liens securing such other secured junior Indebtedness, (ii) on or prior to the incurrence or creation of such other Indebtedness, the agent and lenders under such facility shall have entered into such intercreditor agreements as may be reasonably required or agreed by the Administrative Agent, (iii) to the extent required by Section 2.04(b) and Section 2.04(c), the Net Proceeds of such secured junior Indebtedness is applied to prepay the Loans, (iv) no such secured junior Indebtedness shall provide for a final maturity date, scheduled amortization or any other scheduled repayment, mandatory redemption or sinking fund obligation prior to the Maturity Date, (v) the incurrence of such senior secured junior Indebtedness is permitted by the Revolving Credit Facility, and (vi) no Default or Event of Default then exists or would result therefrom;
(k) Guarantees (i) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party expressly permitted to be incurred under this Agreement, (ii) by the Borrower or any Restricted Subsidiary of Indebtedness of any Restricted Subsidiary that is not a Subsidiary Loan Party to the extent permitted by Section 6.04, and (iii) by any Restricted Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Restricted Subsidiary that is not a Subsidiary Loan Party; provided, that Guarantees under clause (ii) of this Section 6.01(k) and any other Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(k) of any other Indebtedness of a Person that is subordinated to other Indebtedness of such Person shall be expressly subordinated to the Obligations on terms consistent with those used, or to be used, for Subordinated Intercompany Debt;
(l) Indebtedness arising from agreements of the Borrower or any Restricted Subsidiary of the Borrower providing for indemnification, adjustment of purchase price, earn outs 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, assets or a Subsidiary for the purpose of financing such acquisition;
(m) Indebtedness supported by any Letter of Credit (as defined in the Revolving Credit Agreement) that is (i) outstanding on the Closing Date or (ii) issued after the Closing Date in connection with agreements existing on the Closing Date that contemplate or require the issuance of letters of credit; provided, that (x) any such Letter of Credit shall be issued in connection with the Double E Joint Venture or otherwise issued in respect of Indebtedness incurred in anticipation thereofthe ordinary course of business or with respect to trade payables and (y) the aggregate amount available to be drawn under all such Letters of Credit shall not exceed $100.0 million.
(n) Indebtedness consisting of Permitted Junior Debt;
(o) Guarantees of Indebtedness of Unrestricted Subsidiaries and other Persons that are not Loan Parties or Restricted Subsidiaries to the extent that Investments are permitted under Section 6.04(g);
(p) other unsecured Indebtedness not otherwise permitted by this Section 6.01 in an aggregate principal amount at any time outstanding not to exceed U.S.$25.0 million;
(q) Indebtedness of Summit Permian incurred pursuant to the IRB Lease Agreement;
(r) Indebtedness incurred under the Revolving Credit Agreement and Indebtedness pursuant to any Secured Swap Agreements (as defined in the Revolving Credit Agreement) constituting Permitted Swap Agreements and entered into to effectively cap, collar or exchange interest rates with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary Loan Party; provided that such Indebtedness (i) is subject at all times to the Intercreditor Agreement and (ii) the aggregate outstanding principal amount of such Indebtedness does at any time outstanding under the Revolving Credit Agreement shall not exceed the greater of $20,000,000 U.S.$1.0 billion; and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary provided further, that before and after giving effect to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Companysuch incurrence, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (shall be in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 compliance on a Pro Forma Basis with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders orFinancial Performance Covenants, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) computed as of the date of the incurrence of such Indebtedness;
(s) Indebtedness and after giving effect thereto, no Event of Default exists, incurred under the SMLP Holdings Credit Agreement; provided that such Indebtedness is subject at all times to the Intercreditor Agreement; and
(vit) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate paragraphs (a) the Fixed Incremental Amount plus through (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1s) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 2 contracts
Sources: Term Loan Credit Agreement (Summit Midstream Partners, LP), Purchase Agreement (Summit Midstream Partners, LP)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Closing Date and set forth on Schedule 6.01 to the Disclosure Letter and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to a Swap Agreement not entered into for speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementPerson; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 60 days following such incurrence;
(e) Indebtedness of the Borrower and/or to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds any Loan Party shall be subject to Section 6.04(b) or other similar obligations incurred in the ordinary course of business (t) and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any Indebtedness of the foregoing itemsBorrower to any Subsidiary and Indebtedness of any other Loan Party to any Subsidiary that is not a Subsidiary Loan Party that is evidenced by a note or other instrument shall be subordinated to the Obligations;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise performance bonds, bid bonds, appeal bonds, surety bonds, financial assurances and completion guarantees and similar obligations, in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations;
(iig) Indebtedness incurred 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 in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or other cash management services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
; provided that (hx) Guarantees by the Borrower and/or any Subsidiary such Indebtedness (other than credit or purchase cards) is extinguished within five Business Days of its incurrence and (y) such Indebtedness in respect of credit or other obligations purchase cards is extinguished within 60 days of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06its incurrence;
(i) Indebtedness of a Subsidiary or a corporation merged into or consolidated with the Borrower and/or or any Subsidiary existingand Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement; provided that the aggregate principal amount of such Indebtedness acquired after the Closing Date and outstanding at any time under this paragraph (h), after giving effect to such acquisition, merger or consolidation, such assumption or such incurrence, as applicable, would not exceed the greater of $250.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition, merger or consolidation, such assumption or such incurrence, as applicable, for which financial statements have been delivered pursuant to commitments existingSection 5.04, determined on a Pro Forma Basis; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Closing Date; providedBorrower or any Subsidiary prior to or within 270 days after the acquisition, that lease or improvement of the applicable asset in order to finance such acquisition or improvement, and any such Permitted Refinancing Indebtedness in excess respect thereof, in an aggregate principal amount outstanding at any time under this paragraph (i) after giving effect to the incurrence thereof would not exceed the greater of $5,000,000 shall be described 150.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, determined on Schedule 6.01a Pro Forma Basis;
(j) Surety Bond Indebtedness[reserved];
(k) other Indebtedness of the Borrower and/or or any Subsidiary consisting Subsidiary, in an aggregate principal amount outstanding at any time under this paragraph (k) after giving effect to the incurrence thereof, would not exceed the greater of obligations owing under incentive (including dealer incentive)$250.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businessat any time;
(l) Guarantees (i) by any Loan Party of the Indebtedness of the Borrower and/or referred to in paragraph (r) or any Permitted Refinancing Indebtedness in respect thereof, (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party expressly permitted to be incurred under this Agreement, (iii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04(b) and (iv) by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary; provided that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(l) of any other Indebtedness of a Person that is subordinated to other Indebtedness of such Person shall be expressly subordinated to such other Indebtedness to the same extent;
(m) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business or assets of the Borrower or a Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(n) letters of credit or bank guarantees (other than Letters of Credit issued pursuant to Section 2.05) having an aggregate face amount not in excess of $25.0 million at any time outstanding, provided that if the Revolving Facility Commitments are reduced pursuant to Section 2.08, such amount shall be increased by the amount of the Revolving Facility Commitment that was reduced, up to $75.0 million;
(o) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit; provided that such Indebtedness is promptly repaid with the proceeds of any drawing on such Letter of Credit;
(p) Indebtedness consisting of (ix) the financing of insurance premiums, premiums or (iiy) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(mq) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness Foreign Subsidiaries in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 100.0 million and 3510% of Consolidated Adjusted EBITDA Foreign Subsidiary Total Assets as of the last day end of the most recently ended Test Periodfiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, at any time;
(nr) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired Permitted Junior Debt and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; provided, that:;
(is) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded or replaced, except incurred by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than Loan Party in the case form of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is first lien notes secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are Loans and Commitments (“First Lien Pari Passu Notes”) or second lien loans notes secured on a First Priority senior secured second lien basis (“Second Lien basis with respect to the Collateral may participate in Senior Secured Debt”) so long as (x) any voluntary prepayment (A) no Default or Event of Term Loans as set forth in Section 2.11(a)(i) Default shall have occurred and be continuing and (yB) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto to the incurrence of such First Lien Pari Passu Notes or Second Lien Senior Secured Debt the Consolidated Senior Secured Leverage Ratio does not exceed 4.00 to 1.00 on a Pro Forma Basis as of the last day most recent Test Period and as of the most recently ended Test Period, including the application date of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basisincurrence, the First Lien Consolidated Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior 5.75 to the Lien on the Collateral securing the Secured Obligations that are secured 1.00 on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness Pro Forma Basis as of the kind described in clause (c) most recent Test Period and as of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity date of such Term Loans) incurrence and (y) the final maturity date with respect to trustee or other representative for such Incurred Acquisition Debt (other than Customary Bridge Loans First Lien Pari Passu Notes or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term LoanSecond Lien Senior Secured Debt, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise shall have entered into an amortization schedule as determined by intercreditor agreement with the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, Administrative Agent on terms reasonably satisfactory to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofAdministrative Agent;
Appears in 2 contracts
Sources: Revolving Credit Agreement (Nuance Communications, Inc.), Revolving Credit Agreement (Nuance Communications, Inc.)
Indebtedness. The Borrower shall Each Loan Party will not, nor shall it and will not permit any of its Restricted Subsidiaries to, create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:except as follows (collectively, “Permitted Indebtedness”):
(a) Indebtedness in respect of the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loansother than Bank Product Obligations);
(b) Indebtedness of the Borrower to described on Schedule 6.1 and any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that Refinancing Indebtedness in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)respect thereof;
(c) [reserved]Indebtedness of any Loan Party or any Restricted Subsidiary under Floor Plan Financings or for Capital Lease Obligations or Purchase Money Obligations; provided that, immediately after giving effect to any such incurrence, the aggregate principal amount of Indebtedness incurred under this clause (c) and then outstanding does not exceed the greater of (x) $375,000,000 and (y) 50% of Consolidated EBITDA for the most recently ended Test Period;
(d) Indebtedness arising from of any agreement providing for indemnification, adjustment of purchase price Loan Party or similar obligations (including contingent earn-out obligations) any Restricted Subsidiary incurred in connection with any Disposition permitted hereunderrespect of (i) performance bonds, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guarantiescompletion guarantees, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds banker’s acceptances or other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds instruments or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary obligations, in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case in the ordinary course of business, and (ii) obligations under Hedge Agreements entered into for bona fide hedging purposes of any Loan Party and not for speculative purposes;
(e) Indebtedness incurred in the ordinary course of business in respect of obligations credit cards, credit card processing services, debit cards, stored value cards, commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”), or Cash Management Services (including, for the avoidance of doubt, any Bank Product Obligations);
(f) Indebtedness consisting of accommodation guarantees for the benefit of trade creditors of any Loan Party or any Restricted Subsidiary;
(g) Indebtedness of any Loan Party to another Loan Party;
(h) Indebtedness of (i) any Subsidiary which is not a Loan Party to another Subsidiary which is not a Loan Party, (ii) any Subsidiary which is not a Loan Party to any Loan Party (provided that the aggregate amount of Indebtedness incurred under this clause (h)(ii), when taken together with the aggregate amount of Investments made under clause (c)(iii) of the Borrower and/or definition of Permitted Investments (as reduced by any return of capital in respect of any such Investment), shall not exceed the greater of (x) $75,000,000 and (y) 10% of Consolidated EBITDA for the most recently ended Test Period in the aggregate outstanding at any time), or (iii) any Subsidiary that is not a Loan Party to pay any Loan Party so long as the deferred purchase price Payment Conditions shall have been satisfied immediately before and immediately after giving effect to the incurrence of such Indebtedness;
(i) Indebtedness of any Loan Party or any Restricted Subsidiary to any Loan Party or any other Restricted Subsidiary arising pursuant to Permitted Investments and other Permitted Intercompany Activities; provided that, in the case of Indebtedness of any Loan Party owing to any Subsidiary that is not a Loan Party, so long as such Indebtedness is unsecured or subject to the Intercompany Subordination Agreement;
(i) 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 and (ii) customer deposits and advance payments received in the ordinary course of business from customers for goods or services purchased or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into rented in the ordinary course of business;
(hk) unsecured Indebtedness arising from agreements of any Loan Party or any Restricted Subsidiary providing for guarantees, indemnification, obligations in respect of earnouts or other purchase price adjustments or holdback of purchase price or similar obligations, in each case, incurred or assumed in connection with any acquisition or disposition of any business, assets or Subsidiary permitted hereunder, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing the acquisition thereof;
(l) Indebtedness of any Loan Party or any of its Restricted Subsidiaries in respect of Sale Leasebacks permitted under Section 6.5;
(m) Guarantees by the Borrower and/or any Loan Party or any Restricted Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant by a Loan Party or any Restricted Subsidiary hereunder; provided that if the Indebtedness being Guaranteed is subordinated to this Section 6.01 by or pari passu with any of the Borrower Obligations, then the Guarantee shall be subordinated or such Subsidiarypari passu, as applicable, or other obligations of to the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by same extent as the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Indebtedness Guaranteed;
(n) Guarantees or other Indebtedness in respect of Indebtedness of (i) a Person in which a Loan Party has a minority interest or (ii) joint ventures or similar arrangements; provided that at the time of incurrence of any Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existingthis clause (n), on the Closing Date; provided, that any such aggregate principal amount of all Guarantees and other Indebtedness in excess incurred under this clause (n) and then outstanding does not exceed the greater of (x) $5,000,000 shall be described on Schedule 6.01125,000,000 and (y) 30% of Consolidated EBITDA for the most recently ended Test Period;
(jo) Surety Bond Subordinated Indebtedness; provided that both immediately before and on a Pro Forma Basis immediately after the incurrence of such Indebtedness, Borrowers are in compliance with the financial covenant set forth in Section 7 (regardless of whether a Covenant Testing Period is in effect or such covenant is otherwise effective);
(kp) Indebtedness representing deferred compensation, severance and health and welfare retirement benefits to current and former employees of the Parent Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into and its Subsidiaries incurred in the ordinary course of business;
(lq) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) premiums or take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements case in the ordinary course of business;
(mr) Indebtedness arising in connection with the endorsement of instruments or other payment items for deposit,
(s) Indebtedness incurred in respect of netting services, overdraft protection, and other like services, in each case, incurred in the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money ordinary course of business,
(t) accrual of interest, accretion or amortization of original issue discount, or the payment of interest in kind, in each case, on Indebtedness that otherwise constitutes Permitted Indebtedness,
(u) Management Guarantees not exceeding $25,000,000 in an the aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Periodat any time;
(nv) [reserved];
(w) Indebtedness of any Person Restricted Subsidiary that becomes is not a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateLoan Party; provided, provided that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was is not created or incurred in anticipation thereofguaranteed by any Loan Party, and (ii) the holder of such Indebtedness does not have, directly or indirectly, any recourse to any Loan Party, whether by reason of representations or warranties, agreement of the parties, operation of law or otherwise, (iii) such Indebtedness is not secured by any assets other than assets of such Restricted Subsidiary, and (iv) the aggregate principal amount of such Indebtedness, when taken together with the aggregate amount of Indebtedness of Restricted Subsidiaries that are not Loan Parties incurred under clause (x)(i)(A) or (B) below, outstanding at any time shall not exceed the greater of (x) $250,000,000 and (y) 35% of Consolidated EBITDA for the Test Period most recently ended;
(x) (i) Indebtedness of any Loan Party or any Restricted Subsidiary, in addition to that described in clauses (a) through (w) above; provided that as of the date of incurring such Indebtedness and after giving effect thereto (or, at Parent Borrower’s option, on the date of the initial borrowing of such Indebtedness or entry into the definitive agreement providing the commitment to fund such Indebtedness after giving pro forma effect to the incurrence of the entire committed amount of such Indebtedness, in which case such amount may thereafter be borrowed and reborrowed, in whole or in part, from time to time, without further compliance with this proviso):
(A) in the case of unsecured Indebtedness or Indebtedness secured by assets not constituting Collateral, the Interest Coverage Ratio shall be at least 2.00 to 1.00 (but in the case of Indebtedness of a Restricted Subsidiary that is not a Loan Party, subject to the limit set forth in Section 6.1(w) above);
(B) in the case of Indebtedness secured by the Collateral, the Secured Leverage Ratio shall be equal to or less than 4:00 to 1.00 (but in the case of Indebtedness of a Restricted Subsidiary that is not a Loan Party, subject to the limit set forth in Section 6.1(w) above); provided that for purposes of calculating the Secured Leverage Ratio under this clause (B) for purposes of determining whether such Indebtedness may be incurred, any cash proceeds of such Indebtedness then being incurred shall not be netted from the numerator in the determination of the Secured Leverage Ratio; or
(C) the aggregate principal amount of such Indebtedness does not exceed at any time the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date $250,000,000 and (y) the final maturity 35% of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms Consolidated EBITDA for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the Test Period most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred ended; and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Credit Agreement (EquipmentShare.com Inc), Credit Agreement (EquipmentShare.com Inc)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incurassume, assume or otherwise become or remain be liable in any manner with respect to, or permit to exist, any Indebtedness, exceptother than:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Obligations;
(b) Indebtedness of the Borrower Revolving Loans in an aggregate principal amount at any time outstanding not to any Subsidiary and/or of any Subsidiary exceed $12,000,000 solely to the Borrower and/or any other Subsidiary; provided, that in extent the case of any Indebtedness of any Subsidiary owing Revolving Loans are subject to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Intercreditor Agreement;
(c) [reserved]Indebtedness existing on the date of this Agreement and described on Schedule 3.01 of the Disclosure Schedule;
(d) Indebtedness arising from incurred or assumed for the purpose of financing all or any agreement providing for indemnification, adjustment part of purchase price or similar obligations the cost of acquiring any fixed asset (including contingent earn-out obligations) incurred through Capitalized Leases), in connection with an aggregate principal amount at any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementtime outstanding not greater than $100,000;
(e) intercompany Indebtedness of the Borrower and/or any Subsidiary resulting from inter-company loans solely between (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 ordinary course of business Borrower and any Wholly-Owned Domestic Subsidiary Guarantor and (ii) Wholly-Owned Domestic Subsidiary Guarantors, in respect of letters of crediteach case to the extent such Indebtedness is permitted by, bank guarantiesand is subject to, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsIntercompany Subordination Agreement;
(f) Guarantees to the extent permitted pursuant to Section 6.03;
(g) Seller Subordinated Debt in an aggregate principal amount at any time outstanding not to exceed $10,000,000 solely to the extent the Seller Subordinated Debt is subject to the Seller Debt Subordination Agreement;
(h) unsecured Indebtedness arising in connection with the endorsement of the Borrower and/or any Subsidiary instruments or other payment items for deposit or incurred in respect of Banking Services and/or otherwise netting services, overdraft protection, and other like services, in connection with Cash management and Deposit Accountseach case, including incentive, supplier finance or similar programsincurred in the Ordinary Course of Business;
(i) guaranties by Indebtedness incurred in the Borrower and/or Ordinary Course of Business under performance, surety, statutory or appeal bonds;
(j) Indebtedness owed to any Subsidiary Person providing property, casualty, liability or other insurance to any Loan Party, so long as the amount of such Indebtedness is not in excess of the obligations amount of suppliersthe unpaid cost of, distributorsand shall be incurred only to defer the cost of, resellers, customers, licensees such insurance for the year in which such Indebtedness is incurred and sublicensees in the ordinary course of business, such Indebtedness is outstanding only during such year;
(iik) Indebtedness incurred in the ordinary course Ordinary Course of business Business in respect of obligations of the Borrower and/or credit cards, credit card processing services, debit cards, stored value cards, commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”), or cash management or related services in an aggregate amount not to exceed $250,000 at any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods time outstanding and services and (iii) Indebtedness provided that all amounts outstanding in respect of letters of creditsuch credit cards, bankers’ acceptancescredit card processing services, bank guaranties debit cards, stored value cards, commercial cards, or similar instruments supporting trade payables, warehouse receipts cash management or similar facilities entered into related services are paid in the ordinary course of businessfull on a monthly basis;
(hl) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is comprising Investments permitted under Section 6.06;
(im) Indebtedness accrual of the Borrower and/or any Subsidiary existinginterest, accretion or amortization of original issue discount, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness payment of interest in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangementskind, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) on Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money that otherwise constitutes Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Periodpermitted under this Section 6.01;
(n) Indebtedness of obligations (contingent or otherwise) existing or arising under Swap Contracts in an amount not to exceed $250,000 in the aggregate at any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Datetime outstanding; provided, that (i) such Indebtedness obligations are (Aor were) existed at the time entered into by such Person became a Subsidiary in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, foreign exchange rates and (ii) the aggregate outstanding principal amount of such Indebtedness Swap Contract does not exceed contain any provision exonerating the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of non-defaulting party from its obligation to make payments on outstanding transactions to the last day of the most recently ended Test Perioddefaulting party;
(o) Indebtedness consisting of promissory notes issued by Sponsor Subordinated Debt in an aggregate principal amount at any time outstanding not to exceed $470,000 solely to the Borrower or any Subsidiary extent the Sponsor Subordinated Debt is subject to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);Sponsor Debt Subordination Agreement; and
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving unsecured Indebtedness, does of a type not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) described above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed $250,000 in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of at any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds oftime outstanding.
Appears in 2 contracts
Sources: Credit Agreement (LIVE VENTURES Inc), Credit Agreement (LIVE VENTURES Inc)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $2,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to tendersthe Loan Parties shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the global intercompany note substantially in the form of Exhibit J hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business or consistent with past practice or industry practices;
(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 or other cash management services, in each case incurred the ordinary course of business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests, where such acquisition, merger or consolidation is not prohibited by this Agreement (including a Permitted Business Acquisition); provided, that, (x) in the case of any such Indebtedness secured by Liens on Collateral that rank pari passu with the Liens on the Collateral securing the Term B Loans, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the net cash proceeds of such Indebtedness incurred on such date against the applicable amount of Consolidated Debt for purposes of such calculation at such time), and any related transactions is (I) not greater than 4.25 to 1.00 or (II) no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto and (y) in the case of any other such Indebtedness, the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the net cash proceeds of such Indebtedness incurred on such date against the applicable amount of Consolidated Debt for purposes of such calculation at such time), and any related transactions is (I) not greater than 4.75 to 1.00 or (II) no greater than the Total Net Leverage Ratio in effect immediately prior thereto; provided that (1) the incurrence of any Indebtedness for borrowed money pursuant to this clause (h)(i) incurred in contemplation of such acquisition, merger or consolidation (except for any seller note or other seller financing) shall be subject to the last paragraph of this Section 6.01 and (2) the aggregate outstanding principal amount of Indebtedness permitted under this clause (h)(i) incurred by a Subsidiary other than a Subsidiary Loan Party in contemplation of such acquisition, merger or consolidation, together with the aggregate principal amount of Indebtedness of a Subsidiary other than a Subsidiary Loan Party then outstanding pursuant to Section 6.01(s)(i), shall not exceed the greater of $30,000,000 and 4.25% of Consolidated Total Assets as at the end of the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed (A) the greater of $30,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period plus (B) any additional amounts, so long as immediately after giving effect to the incurrence of such additional amounts under this clause (B) and the use of proceeds thereof, the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 4.75 to 1.00, and (y) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations incurred by the Borrower or any Subsidiary in respect of obligations any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) Indebtedness of the Borrower and/or or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $30,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(l) [Reserved];
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to pay be incurred under this Agreement, (ii) by the deferred Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(hp) Guarantees by the Borrower and/or any Subsidiary of other Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary Disqualified Stock of the Borrower or any Subsidiaries in an aggregate outstanding principal amount or liquidation preference not greater than 100.0% of the amount of net cash proceeds received by the Borrower from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the net cash proceeds from the issuance and sale by Holdings or any joint ventureParent Entity of its Qualified Equity Interests or a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the related Investment is permitted under Section 6.06Borrower or any of its Subsidiaries and other than Permitted Cure Securities), to the extent that such net cash proceeds do not increase the Cumulative Credit and do not constitute Excluded Contributions;
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(i) Indebtedness secured by Liens on the Collateral ranking pari passu with the Liens on the Collateral securing the Term B Loans so long as (x) at the time of incurrence thereof, no Default or Event of Default shall have occurred and be continuing and (y) immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 4.25 to 1.00; provided that, (1) the net cash proceeds of Indebtedness incurred under this clause (r)(i) at such time shall not be netted against the applicable amount of Consolidated Debt for purposes of such calculation of the Net First Lien Leverage Ratio at such time and (2) the incurrence of any Indebtedness pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) other Indebtedness so long as (x) at the time of incurrence thereof, no Default or Event of Default shall have occurred and be continuing, (y) immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 4.75 to 1.00 and (z) the aggregate principal amount of Indebtedness permitted under this clause (s)(i) incurred by a Subsidiary other than a Subsidiary Loan Party, together with the aggregate principal amount of Indebtedness of a Subsidiary other than a Subsidiary Loan Party then outstanding pursuant to Section 6.01(h)(i) incurred in contemplation of an acquisition, merger or consolidation, shall not exceed the greater of $30,000,000 and 4.25% of Consolidated Total Assets as at the end of the then most recently ended Test Period; provided that, (1) the net cash proceeds of Indebtedness incurred under this clause (s)(i) at such time shall not be netted against the applicable amount of Consolidated Debt for purposes of such calculation of the Total Net Leverage Ratio at such time and (2) the incurrence of any Indebtedness pursuant to this clause (s)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(t) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $30,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness incurred in the ordinary course of business and/or (iii) in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements 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 or any Hedging Agreements.
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower (or, to the extent such work is done for the Borrower or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(mw) Indebtedness in connection with Permitted Receivables Financings;
(x) obligations in respect of the Borrower and/or Cash Management Agreements;
(y) Refinancing Notes and any Subsidiary with Permitted Refinancing Indebtedness incurred in respect to Capital Leases and purchase money thereof;
(i) Indebtedness in an aggregate outstanding principal amount outstanding not to exceed at the greater time of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of incurrence the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateIncremental Amount available at such time; provided, that (i1) there shall be no obligor in respect of any such Indebtedness that is not a Loan Party and (A2) existed at the time such Person became a Subsidiary or the assets incurrence of any Indebtedness pursuant to this clause (z)(i) shall be subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(aa) Guarantees of Indebtedness under ordinary course customer financing lines or credit;
(bb) Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(bb), would not exceed the greater of $20,000,000 30,000,000 and 254.25% of the Consolidated Adjusted EBITDA Total Assets as at the end of the last day of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(occ) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pdd) Indebtedness refinancing, refunding consisting of obligations of the Borrower or replacing any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(ee) Indebtedness permitted under clauses of the Borrower or any Subsidiary to or on behalf of any joint venture (a), regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bbincluding with respect to intercompany self-insurance arrangements) and/or of the Borrower and its Subsidiaries;
(ff) Indebtedness supported by a Letter of this Section 6.01 (Credit, in any case, including any refinancing Indebtedness incurred a principal amount not in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) excess of the principal stated amount of such Indebtedness does not exceed the principal amount Letter of the Indebtedness being refinancedCredit; and
(gg) all premium (if any, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discountsexpenses, other reasonable and customary feesdefeasance costs, commissions and expenses interest (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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 6.02post-petition interest),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiumsexpenses, rate floors, optional prepayment, redemption terms charges and additional or subordination terms and, with respect to Refinancing Indebtedness incurred contingent interest on obligations described in respect of Indebtedness permitted under clause clauses (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or through (ff) (solely as it relates to the Fixed Incremental Amount) above or refinancings thereof. For purposes of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofdete
Appears in 2 contracts
Sources: First Lien Credit Agreement (AP Gaming Holdco, Inc.), First Lien Credit Agreement (AP Gaming Holdco, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Effective Date and any Additional Opco Revolving Facility Repayment Term Loans)listed on Schedule 6.01(a) hereto;
(b) Indebtedness of created under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Transaction Documents;
(c) [reserved]Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Company or any Subsidiary thereof, pursuant to reimbursement or indemnification obligations to such person; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than thirty (30) days following such incurrence;
(d) Indebtedness arising from any agreement providing for indemnificationconsisting of royalty payments or royalty obligations under the ▇▇▇▇▇▇▇ Lease or the ▇▇▇▇▇▇▇ Trust Lease, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or under any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance agreement in respect of the Borrower or acquisition of any Subsidiary pursuant to any such agreementAfter Acquired Property the acquisition of which is approved by the Investor;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of creditperformance bonds, bank guarantiesbid bonds, appeal bonds, surety bonds, performance bonds or letters of credit and completion guarantees and similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary obligations, in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations (iiincluding land reclamation and other obligations under Mining Permits and Environmental Permits) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(hf) Capital Lease Obligations and purchase money security interest Indebtedness incurred by the Company at the time of and for the purpose of the acquisition or lease of the respective asset in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to this paragraph (f) would not exceed $500,000; and
(g) Guarantees by the Borrower and/or any Subsidiary Transaction Party of any Indebtedness or other obligations of the Borrower, Company or any Subsidiary and/or any joint venture with respect to Indebtedness otherwise other Transaction Party expressly permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 2 contracts
Sources: Investment Agreement (Desert Hawk Gold Corp.), Investment Agreement (Desert Hawk Gold Corp.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) the Secured Obligations Existing Notes, (including any Additional Term Loans ii) [reserved] and (iii) other Indebtedness existing on the Closing Date and set forth on Schedule 6.01 (excluding Indebtedness under clause (b) of this Section 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Subsidiary of the Borrower);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]Indebtedness of the Borrower and its Relevant Subsidiaries pursuant to Swap Agreements permitted by Section 6.13;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Relevant Subsidiary of the Borrower, pursuant to any reimbursement or indemnification obligations to such agreementPerson in the ordinary course of business;
(e) Indebtedness of the Borrower and/or or any Relevant Subsidiary owing to the Borrower or any Subsidiary of the Borrower to the extent permitted by Section 6.04, provided that Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party (ithe “Subordinated Intercompany Debt”) pursuant shall be subordinated to tendersthe Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of performance bonds, statutory warranty bonds, bid bonds, appeal bonds, surety bonds, labor bonds and completion or performance guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) in respect Indebtedness arising out of letters of creditadvances on exports, bank guarantiesadvances on imports, surety bondsadvances on trade receivables, performance bonds or customer prepayments and similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into transactions in the ordinary course of business;
(hg) Guarantees Indebtedness arising from the honoring by the Borrower and/or any Subsidiary of Indebtedness a bank or other obligations financial institution of a check, draft or similar instrument drawn against insufficient funds in the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, ordinary course of business or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that cash management services in the case ordinary course of any Guarantee by the Borrower business, provided that (x) such Indebtedness (other than credit or purchase cards) is extinguished within five Business Days of the obligations its incurrence and (y) such Indebtedness in respect of any Subsidiary of the Borrower credit or of any joint venture, the related Investment purchase cards is permitted under Section 6.06extinguished within 60 days from its incurrence;
(i) Indebtedness of a Relevant Subsidiary acquired after the Closing Date or a Person merged into, amalgamated or consolidated with the Borrower and/or or any Relevant Subsidiary existingafter the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger, amalgamation or consolidation and is not created in contemplation of such event and where such acquisition, merger, amalgamation or consolidation is permitted by this Agreement, provided that the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger, amalgamation or consolidation, such assumption or such incurrence, as applicable (together with Indebtedness outstanding pursuant to commitments existingthis paragraph (h), on paragraph (i) of this Section 6.01 and the Closing Date; providedRemaining Present Value of outstanding leases permitted under Section 6.03), that would not exceed the greater of $125.0 million and 2.0 % of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition, merger, amalgamation or consolidation, such assumption or such incurrence, as applicable, for which financial statements have been delivered pursuant to Section 5.04 and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Borrower or any Relevant Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition, lease or improvement, and any Permitted Refinancing Indebtedness in excess respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (h) of this Section 6.01, this paragraph (i) and the Remaining Present Value of leases permitted under Section 6.03) would not exceed the greater of $5,000,000 shall be described on Schedule 6.01125.0 million and 2.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(j) Surety Bond IndebtednessCapital Lease Obligations incurred by the Borrower or any Relevant Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) Indebtedness other Indebtedness, in an aggregate principal amount at any time outstanding pursuant to this Section 6.01(k) not in excess of the Borrower and/or any Subsidiary consisting greater of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course $100.0 million and 1.5 % of businessConsolidated Total Assets;
(l) Guarantees (i) by any Loan Party or any other Relevant Subsidiary of any Indebtedness of the Borrower and/or or any other Loan Party expressly permitted to be incurred under this Agreement; provided, that a Relevant Subsidiary consisting that is not a Loan Party shall not be permitted to Guarantee Indebtedness of a Loan Party pursuant to this sub-clause (i) the financing of insurance premiumsunless such Relevant Subsidiary becomes (and remains) a guarantor hereunder while such Guarantee is outstanding, (ii) take-or-pay obligations contained in supply arrangementsby the Borrower or any Relevant Subsidiary of Indebtedness of any Subsidiary that is not a Loan Party to the extent permitted by Section 6.04, in each case, (iii) by any Relevant Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party and (iv) by the Borrower of Indebtedness of Foreign Subsidiaries incurred for working capital purposes in the ordinary course of business and/or on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(k) or (iiip); provided that Guarantees by any Loan Party under this Section 6.01(l) obligations of any other Indebtedness of a Person that is subordinated to reacquire assets other Indebtedness of such Person shall be expressly subordinated to the Obligations on terms consistent with those used, or inventory in connection with customer financing arrangements in the ordinary course of businessto be used, for Subordinated Intercompany Debt;
(m) Indebtedness arising from agreements of the Borrower and/or or any Relevant Subsidiary of the Borrower providing for indemnification, adjustment of purchase price, earn outs or similar obligations, in each case, incurred or assumed in connection with respect 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, assets or a Subsidiary for the purpose of financing such acquisition;
(n) Indebtedness supported by a Revolving Letter of Credit, in a principal amount not in excess of the stated amount of such Revolving Letter of Credit;
(o) Indebtedness consisting of Permitted Junior Debt;
(p) Indebtedness of Relevant Subsidiaries that are Foreign Subsidiaries (including letters of credit or bank guarantees (other than Revolving Letters of Credit issued pursuant to Capital Leases and purchase money Indebtedness Section 2.05) for working capital purposes incurred in the ordinary course of business on ordinary business terms in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 25.0 million and 350.5% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodTotal Assets outstanding at any time);
(ni) Indebtedness of any Person that becomes a Subsidiary or Indebtedness incurred and/or assumed in connection with any acquisition Section 6.04(j) or similar Investment permitted hereunder after the Closing Date6.04(q); provided, provided that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does outstanding pursuant to this Section 6.01(q) shall not exceed the greater of $20,000,000 150.0 million and 252.5% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;Total Assets and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; and
(or) Indebtedness consisting of promissory notes issued by the Borrower all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses contingent interest on obligations described in paragraphs (a)) through (q) above. For purposes of determining compliance with this Section 6.01, (i), ) in the event that an item of Indebtedness (j), (m), (n), (q), (r), (u), (w), (y), (z), (bbor any portion thereof) and/or (ff) meets the criteria of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the principal amount of such Indebtedness does not exceed the principal amount more than one of the Indebtedness being refinanced, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect categories of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in Borrower or a Relevant Subsidiary, as the case of Refinancing Indebtedness incurred may be, in respect of Indebtedness permitted under clause (a) of this Section 6.01its sole discretion, (A) such Indebtednessmay classify, if secured, is secured only by Permitted Liens at the time of incurrence, such refinancing, refunding item of Indebtedness (or replacement (it being understood that secured Indebtedness may any portion thereof) in any such category and will only be refinanced with unsecured Indebtedness), and if the Liens securing required to include such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1or any portion thereof) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect one of the categories of Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to in this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, 6.01; and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on at the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basistime of incurrence, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecuredBorrower or a Relevant Subsidiary, either (1) as the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) providedcase may be, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtednessin its sole discretion, and
(B) if such Incurred Acquisition Debt consists may divide and classify an item of Indebtedness for borrowed money (or Indebtedness any portion thereof) in more than one of the kind described categories of Indebtedness permitted in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofthis Section 6.01.
Appears in 2 contracts
Sources: Credit Agreement (Crestwood Midstream Partners LP), Credit Agreement (Crestwood Equity Partners LP)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Closing Date and set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower other Loan Documents and any Permitted Refinancing Indebtedness incurred to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, Refinance such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Swap Agreements permitted by Section 6.12;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business; provided, that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing 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 ordinary course of business Loan Parties shall be subject to Section 6.04(b) and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any Indebtedness of the foregoing itemsBorrower to Holdings or any Subsidiary and Indebtedness of any other Loan Party to Holdings or any Subsidiary that is not a Subsidiary Loan Party (the “Subordinated Intercompany Debt”) shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;
(iig) Indebtedness incurred 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 or other cash management services in the ordinary course of business; provided, that (x) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to the Borrower of its incurrence and (y) such Indebtedness in respect of obligations credit or purchase cards is extinguished within 60 days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged into or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) immediately after giving effect to such acquisition, merger or consolidation, the assumption and incurrence of any Indebtedness and any related transactions, the Borrower shall be in Pro Forma Compliance;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the Remaining Present Value of outstanding leases permitted under Section 6.03, would not exceed the greater of $75.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(j) Capital Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) other Indebtedness of the Borrower and/or or any Subsidiary, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $75.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(l) Indebtedness of the Borrower pursuant to (i) the Second Lien Notes in an aggregate principal amount that is not in excess of $600.0 million, (ii) the Senior Subordinated Notes in an aggregate principal amount that is not in excess of $300.0 million, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(m) Guarantees (i) by the Subsidiary Loan Parties of the Indebtedness of the Borrower described in paragraph (1) of this Section 6.01, so long as the Guarantee of the Senior Subordinated Notes or any Permitted Refinancing Indebtedness in respect thereof is subordinated substantially on terms as set forth in the Senior Subordinated Notes Indenture with respect to the Senior Subordinated Notes, and so long as any Liens securing the Guarantee of the Second Lien Notes or any Permitted Refinancing Indebtedness in respect thereof are subject to the Intercreditor Agreement, (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to pay be incurred under this Agreement, (iii) by the deferred Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of Holdings or any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iv) by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary, and (v) by the Borrower of Indebtedness of Foreign Subsidiaries incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01 (s) to the extent such Guarantees are permitted by 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Obligations to at least the same extent as the Guarantee of the Senior Subordinated Notes is under the Senior Subordinated Notes Indenture;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations, in each case, incurred or progress payments assumed in connection with the Transactions and any Permitted Business Acquisition or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such goods and services and business, assets or a Subsidiary for the purpose of financing such acquisition;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations (other than obligations in respect of other Indebtedness) in the ordinary course of business;
(hp) Guarantees Indebtedness supported by the Borrower and/or any Subsidiary a Letter of Indebtedness or other obligations Credit, in a principal amount not in excess of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or stated amount of such Subsidiary, as applicable, or other obligations Letter of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Credit;
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or business;
(r) Indebtedness consisting of Permitted Additional Debt and Permitted Refinancing Indebtedness in respect thereof so long as (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (ii) the Borrower and its Subsidiaries shall be in Pro Forma Compliance after giving effect to the issuance, incurrence or assumption of such Indebtedness and (iii) in the case of any Permitted Additional Debt that is secured, immediately after giving effect to the issuance, incurrence or assumption of such Indebtedness, the Total Net Senior Secured Leverage Ratio on a Pro Forma Basis shall not be greater than 6.00 to 1.00;
(s) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $50.0 million outstanding at any time;
(t) unsecured Indebtedness in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements such goods and services; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligations) in the ordinary course of business and not in connection with the borrowing of money or any Swap Agreements;
(u) Indebtedness representing deferred compensation to employees of the Borrower or any Subsidiary incurred in the ordinary course of business;
(mv) Indebtedness in connection with Permitted Receivables Financings; provided that the proceeds thereof are applied in accordance with Section 2.11(b);
(w) Indebtedness of the Borrower and/or any Subsidiary with respect and the Subsidiaries incurred under lines of credit or overdraft facilities (including, but not limited to, intraday, ACH and purchasing card/T&E services) extended by one or more financial institutions reasonably acceptable to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as Administrative Agent or one or more of the last day Lenders and (in each case) established for the Borrower’s and the Subsidiaries’ ordinary course of operations (such Indebtedness, the “Overdraft Line”), which Indebtedness may be secured as, but only to the extent, provided in Section 6.02(b) and in the Security Documents (it being understood, however, that for a period of 30 consecutive days during each fiscal year of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after Borrower the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does under the Overdraft Line shall not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a10.0 million);
(px) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses all premium (aif any), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties and premiums interest (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 and the related refinancing transaction, (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 definition (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 6.02post-petition interest),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiumsexpenses, rate floors, optional prepayment, redemption terms charges and additional or subordination terms and, with respect to Refinancing Indebtedness incurred contingent interest on obligations described in respect of Indebtedness permitted under clause paragraphs (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), through (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 2 contracts
Sources: Credit Agreement (Verso Paper Holdings LLC), Credit Agreement (Verso Sartell LLC)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date and (including other than in the case of any Additional Term Loans existing letters of credit to be replaced with Letters of Credit issued hereunder) set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a Person not affiliated with the Company or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]Indebtedness of the Company and the Subsidiaries pursuant to Swap Agreements permitted by Section 6.13;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower Company or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementPerson, provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than thirty (30) days following such incurrence;
(e) Indebtedness of the Borrower and/or Company or any Subsidiary to the extent permitted by Section 6.04, provided that Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party (ithe “Subordinated Intercompany Debt”) pursuant shall be subordinated to tendersthe Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of performance bonds, statutory warranty bonds, bid bonds, appeal bonds, surety bonds and completion or performance guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) Indebtedness arising out of advances on exports, advances on imports, advances on trade receivables, customer prepayments and similar transactions in respect the ordinary course of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsbusiness and consistent with past practice;
(fg) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programs;
(i) guaranties by instrument drawn against insufficient funds in the Borrower and/or any Subsidiary ordinary course of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees business or other cash management services in the ordinary course of business, provided that (x) such Indebtedness (other than credit or purchase cards) is extinguished within three (3) Business Days of its incurrence and (y) such Indebtedness in respect of credit or purchase cards is extinguished within sixty (60) days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a Person merged into or consolidated with the Company or any Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness, provided that the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger or consolidation, such assumption or such incurrence, as applicable (together with Indebtedness outstanding pursuant to this paragraph (h), paragraph (i) of this Section 6.01 and the Remaining Present Value of outstanding leases permitted under Section 6.03), would not exceed U.S.$50.0 million;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Company or any Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (h) of this Section 6.01, this paragraph (i) and the Remaining Present Value of leases permitted under Section 6.03) would not exceed U.S.$50.0 million;
(j) Capital Lease Obligations incurred by the Company or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) other Indebtedness, in an aggregate principal amount at any time outstanding pursuant to this paragraph (k) not in excess of U.S.$50.0 million;
(l) unsecured senior or subordinated Indebtedness of the Borrowers and any unsecured senior or subordinated Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness, in each case in the form of Permitted Debt Securities; provided that both immediately prior to and after giving effect (including pro forma effect) thereto, no Default or Event of Default shall exist or would result therefrom;
(m) Guarantees (i) by the Loan Parties of the Indebtedness of the Borrowers described in paragraph (l), (ii) by any Loan Party of any Indebtedness of the Company or any Loan Party expressly permitted to be incurred under this Agreement, (iii) by the Company or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of the Company or any Subsidiary that is not a Loan Party to the extent permitted by Section 6.04, (iv) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party; provided that all Foreign Subsidiaries may guarantee obligations of other Foreign Subsidiaries under ordinary course cash management obligations, and (v) by the Company or any Subsidiary of Indebtedness of Foreign Subsidiaries incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(a), (k) or (s); provided that Guarantees by any Loan Party under this Section 6.01(m) of any other Indebtedness of a Person that is subordinated to other Indebtedness of such Person shall be expressly subordinated to the Obligations on terms consistent with those used, or to be used, for Subordinated Intercompany Debt;
(n) Indebtedness arising from agreements of the Company or any Subsidiary providing for indemnification, adjustment of purchase price, earn outs 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, assets or a Subsidiary for the purpose of financing such acquisition;
(o) Indebtedness in connection with Permitted Receivables Financings; provided that the proceeds thereof are applied in accordance with Section 2.11(c) to the extent they constitute Net Proceeds;
(p) letters of credit or bank guarantees (other than Letters of Credit issued pursuant to Section 2.05) having an aggregate face amount not in excess of U.S.$20.0 million;
(q) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit;
(r) [Intentionally Omitted];
(s) Indebtedness of Foreign Subsidiaries (including letters of credit or bank guarantees (other than Letters of Credit issued pursuant to Section 2.05) and including all Indebtedness of Chart Ferox, a.s. under its existing revolving credit facilities or any refinancings thereof) for working capital purposes incurred in the ordinary course of business in respect of obligations of the Borrower and/or an aggregate amount not to exceed U.S.$30.0 million outstanding at any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of businesstime;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(it) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on Company and its Subsidiaries in respect of factoring of receivables from a foreign customer held by the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases Company and purchase money Indebtedness its Subsidiaries in an aggregate outstanding principal amount not to exceed the greater of U.S. $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period15.0 million at any time;
(nu) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date[Intentionally Omitted]; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause paragraphs (a) of this Section 6.01, through (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1t) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 2 contracts
Sources: Credit Agreement (Chart Industries Inc), Credit Agreement (Chart Industries Inc)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (x) Indebtedness (other than as described in Section 6.01(b) below) existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is owed to any person other than BGI and/or one or more of its Subsidiaries, in an aggregate amount in excess of $5,000,000 shall be set forth in Schedule 6.01) and (y) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided, that any Indebtedness outstanding pursuant to this clause (a) which is owed by a Loan Party to any Subsidiary that is not a Loan Party shall be subordinated in right of payment to the same extent required pursuant to Section 6.01(e);
(b) Indebtedness created hereunder (including pursuant to Section 2.21, Section 2.22 and Section 2.23) and under the other Loan Documents and any Refinancing Notes incurred to Refinance such Indebtedness;
(c) Indebtedness of BGI or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the Borrower benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to BGI or any Subsidiary, pursuant to reimbursement or indemnification obligations to such person, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of BGI to any Subsidiary and/or and of any Subsidiary to the Borrower and/or BGI or any other Subsidiary; provided, that in the case of Indebtedness owed by any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower Loan Party to any Subsidiary must be unsecured and expressly subordinated that is not a Guarantor incurred pursuant to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonablythis Section 6.01(e) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness than intercompany current liabilities incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods the cash management, tax and services accounting operations of BGI and its Subsidiaries) shall be subordinated in right of payment to the Loan Obligations under this Agreement on terms reasonably satisfactory to the Administrative Agent;
(iiif) Indebtedness in respect of letters performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case provided in the ordinary course of creditbusiness or consistent with past practice or industry practices, bankers’ acceptancesincluding those incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank guaranties or other financial institution of a check, draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Amendment No. 2 (Barnes Group Inc), Credit Agreement (Barnes Group Inc)
Indebtedness. The Borrower shall notNeither the Parent, any Borrower, nor shall it permit any other Credit Party shall, without the prior written consent of its Subsidiaries to, directly or indirectlythe Required Lenders, create, incur, assume assume, guarantee or be or remain liable, contingently or otherwise become or remain liable with respect to any Recourse Indebtedness, except:
: (a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
Indebtedness under this Agreement; (b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; providedParent, that in the case of any Indebtedness of any Subsidiary owing to the Parent Borrower, such Indebtedness shall be or Holdings under any Hedging Obligations permitted as an Investment under Section 6.06; providedthis Agreement, further, that any (c) Indebtedness of the Parent or Parent Borrower whose recourse is solely for so-called “bad-boy” acts in respect to Indebtedness secured by Real Property of its Subsidiaries, including without limitation, (i) failure to account for a tenant’s security deposits, if any, for rent or any other payment collected by a borrower from a tenant under the lease, all in accordance with the provisions of any applicable loan documents, (ii) fraud or a material misrepresentation made by a Borrower or Subsidiary thereof, or the holders of beneficial or ownership interests in such Subsidiary, in connection with the financing evidenced by the applicable loan documents; (iii) any attempt by a Borrower or any Guarantor or Subsidiary thereof to divert or otherwise cause to be diverted any amounts payable to the applicable lender in accordance with the applicable loan documents; (iv) the misappropriation or misapplication of any insurance proceeds or condemnation awards relating to any Real Property securing such Indebtedness; (v) voluntary or involuntary bankruptcy by a Borrower or any Guarantor or Subsidiary must be unsecured thereof; (vi) any environmental matter(s) affecting any Real Property securing such Indebtedness; (vii) failure to deliver statements, schedules, reports, or books and expressly subordinated records in accordance with the provisions of any applicable loan documents; (viii) failure to pay any deferred amounts in accordance with the Obligations provisions of any applicable loan documents; (ix) any material waste of any Real Property securing such Indebtedness; (x) the failure to comply with any single purpose entity requirements in accordance with the provisions of any applicable loan documents; and (xi) the occurrence of any transfer of any interest in violation of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction provisions of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
any applicable loan documents; (d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) trade payables and operating expenses incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(ie) Indebtedness of the Parent and Parent Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on under the Closing DateBridge Loans in compliance with the financial covenants in Section 5.02; provided, provided that any such Indebtedness shall not be secured by or have as credit support any direct or indirect interest in excess of $5,000,000 shall be described on Schedule 6.01;
the Borrowers, the Borrowing Base Properties or Borrowing Base Property Owners or any Collateral; (jf) Surety Bond Indebtedness;
(k) at any time prior to the Collateral Termination Date but only to the extent that no Bridge Loans are then outstanding, Recourse Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” other than the cash proceeds of the applicable Indebtedness being incurred and, Obligations) in the case of any revolving indebtedness, assuming a full utilization thereofprincipal amount permitted under Section 5.02(i), giving effect to any related transaction in connection therewith ; (g) from and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on after the Collateral that is pari passu with the Lien on the Collateral securing the Termination Date, Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Recourse Indebtedness of the kind described Parent so long as the Credit Parties remain in clause compliance with the financial covenants in Section 5.02; and (ch) from and after the Collateral Termination Date, other Unsecured Indebtedness of the definition thereof:
(C) (x) Credit Parties so long as the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than Credit Parties remain in compliance with the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans financial covenants in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofSection 5.02.
Appears in 2 contracts
Sources: Increase Agreement, Joinder, and Second Amendment to Credit Agreement (Vinebrook Homes Trust, Inc.), Revolving Credit Agreement (Vinebrook Homes Trust, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $2,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to tendersthe Loan Parties shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the global intercompany note substantially in the form of Exhibit J hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business or consistent with past practice or industry practices;
(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 or other cash management services, in each case incurred the ordinary course of business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests, where such acquisition, merger or consolidation is not prohibited by this Agreement (including a Permitted Business Acquisition); provided, that, (x)(I) the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof, and any related transactions is no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, and (II) the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the net cash proceeds of such Indebtedness incurred on such date against the applicable amount of Consolidated Debt for purposes of such calculation), and any related transactions is not greater than 4.50 to 1.00 or (y) the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions is no greater than the Total Net Leverage Ratio in effect immediately prior thereto; provided that (1) the incurrence of any Indebtedness for borrowed money pursuant to this clause (h)(i) incurred in contemplation of such acquisition, merger or consolidation (except for any seller note or other seller financing) shall be subject to the last paragraph of this Section 6.01 and (2) the aggregate outstanding principal amount of Indebtedness permitted under this clause (h)(i) incurred by a Subsidiary other than a Subsidiary Loan Party in contemplation of such acquisition, merger or consolidation, together with the aggregate principal amount of Indebtedness of a Subsidiary other than a Subsidiary Loan Party then outstanding pursuant to Section 6.01(s)(i), shall not exceed the greater of $10,000,000 and 4.25% of Consolidated Total Assets as at the end of the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed (A) the greater of $10,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period plus (B) any additional amounts, so long as immediately after giving effect to the incurrence of such additional amounts under this clause (B) and the use of proceeds thereof, the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 4.50 to 1.00, and (y) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations incurred by the Borrower or any Subsidiary in respect of obligations any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) other Indebtedness of the Borrower and/or or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $10,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(l) [Reserved];
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to pay be incurred under this Agreement, (ii) by the deferred Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(hp) Guarantees by the Borrower and/or any Subsidiary of other Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary Disqualified Stock of the Borrower or any Subsidiaries in an aggregate outstanding principal amount or liquidation preference not greater than 100.0% of the net cash proceeds received by the Borrower from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the net cash proceeds from the issuance and sale by Holdings or any joint ventureParent Entity of its Qualified Equity Interests or a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the related Investment is permitted under Section 6.06Borrower or any of its Subsidiaries and other than Permitted Cure Securities), to the extent that such net cash proceeds do not increase the Cumulative Credit and do not constitute Excluded Contributions;
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(i) Indebtedness secured by Liens on the Collateral ranking pari passu with the Liens on the Collateral securing the Term B Loans so long as (x) at the time of incurrence thereof, no Default or Event of Default shall have occurred and be continuing and (y) immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 3.75 to 1.00; provided that, (1) the net cash proceeds of Indebtedness incurred under this clause (r) at such time shall not be netted against the applicable amount of Consolidated Debt for purposes of such calculation of the Net First Lien Leverage Ratio and (2) the incurrence of any Indebtedness pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) other Indebtedness so long as (x) at the time of incurrence thereof, no Default or Event of Default shall have occurred and be continuing, (y) immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 4.50 to 1.00 and (z) the aggregate principal amount of Indebtedness permitted under this clause (s)(i) incurred by a Subsidiary other than a Subsidiary Loan Party, together with the aggregate principal amount of Indebtedness of a Subsidiary other than a Subsidiary Loan Party then outstanding pursuant to Section 6.01(h)(i) incurred in contemplation of an acquisition, merger or consolidation, shall not exceed the greater of $10,000,000 and 4.25% of Consolidated Total Assets as at the end of the then most recently ended Test Period; provided that, (1) the net cash proceeds of Indebtedness incurred under this clause (s) at such time shall not be netted against the applicable amount of Consolidated Debt for purposes of such calculation of the Total Net Leverage Ratio and (2) the incurrence of any Indebtedness pursuant to this clause (s)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(t) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $10,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness incurred in the ordinary course of business and/or (iii) in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements 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 or any Hedging Agreements.
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower (or, to the extent such work is done for the Borrower or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(mw) Indebtedness in connection with Permitted Receivables Financings;
(x) obligations in respect of the Borrower and/or Cash Management Agreements;
(y) Refinancing Notes and any Subsidiary with Permitted Refinancing Indebtedness incurred in respect to Capital Leases and purchase money thereof;
(i) Indebtedness in an aggregate outstanding principal amount outstanding not to exceed at the greater time of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of incurrence the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateIncremental Amount available at such time; provided, that (i1) there shall be no obligor in respect of any such Indebtedness that is not a Loan Party and (A2) existed at the time such Person became a Subsidiary or the assets incurrence of any Indebtedness pursuant to this clause (z)(i) shall be subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(aa) Guarantees of Indebtedness under ordinary course customer financing lines or credit;
(bb) Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(bb), would not exceed the greater of $20,000,000 10,000,000 and 254.25% of the Consolidated Adjusted EBITDA Total Assets as at the end of the last day of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(occ) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pdd) Indebtedness refinancing, refunding consisting of obligations of the Borrower or replacing any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(ee) Indebtedness permitted under clauses of the Borrower or any Subsidiary to or on behalf of any joint venture (a), regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bbincluding with respect to intercompany self-insurance arrangements) and/or of the Borrower and its Subsidiaries;
(ff) Indebtedness supported by a Letter of this Section 6.01 (Credit, in any case, including any refinancing Indebtedness incurred a principal amount not in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) excess of the principal stated amount of such Indebtedness does not exceed the principal amount Letter of the Indebtedness being refinancedCredit; and
(gg) all premium (if any, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discountsexpenses, other reasonable and customary defeasance costs, interest (including post-petition interest), fees, commissions expenses, charges and expenses additional or contingent interest on obligations described in clauses (including upfront fees, original issue discount a) through (ff) above or initial yield payments) incurred in connection refinancings thereof. For purposes of determining compliance with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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 secured6.01, the Lien securing such amount of any Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (andeffect, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofrespec
Appears in 2 contracts
Sources: First Lien Credit Agreement (AP Gaming Holdco, Inc.), Incremental Assumption Agreement (AP Gaming Holdco, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Amendment Two Effective Date and set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements permitted by Section 6.11;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or any Subsidiary (i) any Subsidiary Loan Party to the Borrower or any other Subsidiary, (ii) the Borrower to any Subsidiary Loan Party or (iii) any Subsidiary other than a Subsidiary Loan Party to the Borrower or any other Subsidiary; provided that (A) Indebtedness 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 ordinary course of business clauses (i) and (ii) of this Section 6.01(e) shall be unsecured and subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent and (B) Indebtedness pursuant to clause (iii) of this Section 6.01(e) shall be subject to Section 6.04(a);
(f) Indebtedness (including obligations in respect of letters of credit, bank guarantiesin an amount not to exceed, surety bondsin the aggregate with the Indebtedness under Section 6.01(m)(A) and Section 6.01(v) below, performance bonds or similar instruments to support $25.0 million outstanding at any of the foregoing items;
(ftime) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, including (iix) Indebtedness those incurred in the ordinary course of business in respect of to secure health, safety and environmental obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business, so long as the underlying obligations with respect to any of the foregoing are not Indebtedness for borrowed money and (y) those intended to secure a Guarantee permitted under Section 6.01(v);
(hg) Guarantees Indebtedness arising from the honoring by the Borrower and/or any Subsidiary of Indebtedness a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds or obligations under Cash Management Agreements, in each case in the ordinary course of the Borrower, any Subsidiary and/or any joint venture with respect business; provided that (x) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, other applicable Loan Party or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower its incurrence, and (y) such Indebtedness in respect of credit or of any joint venture, the related Investment purchase cards is permitted under Section 6.06extinguished within 60 days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or an entity merged into or consolidated or amalgamated with the Borrower and/or or any Subsidiary existing, or pursuant to commitments existing, on after the Closing Date; provided, that any such and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in excess each case exists at the time of $5,000,000 such acquisition, merger or consolidation or amalgamation and is not created in contemplation of such event and where such acquisition, merger or consolidation or amalgamation is permitted by this Agreement, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided that (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) immediately after giving effect to such acquisition, merger or consolidation or amalgamation, the assumption and incurrence of any Indebtedness and any related transactions, the Borrower and the other Subsidiaries of Holdings shall be described on Schedule 6.01in Pro Forma Compliance;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiumsCapital Lease Obligations, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases mortgage financings and purchase money Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease or improvement of any property (real or personal and whether through the direct purchase of property or the Equity Interests of any person owning such property) permitted under this Agreement in order to finance the acquisition, lease or improvement of such property, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate outstanding principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the Remaining Present Value of outstanding leases permitted under Section 6.03, would not exceed $150.0 million; provided, any such Indebtedness (i) shall be secured only by the property acquired or improved (and any related property and assets subject to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as a common financing program of the last day of the most recently ended Test Period;
(ntype permitted under this Section 6.01(i)) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect theretoproceeds, no Event of Default exists, and
(vi) in the case of Replacement Debtimprovements and replacements thereof, (Aii) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
and (iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does shall constitute not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less more than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness 100% of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date aggregate consideration paid with respect to such Incurred Acquisition Debt property or improvement (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to and any then-existing Term Loan, as applicable, thereof;
(D) related property subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by a common financing program of the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds oftype permitted under this Section 6.01(i));
Appears in 2 contracts
Sources: Credit Agreement (Verso Corp), Credit Agreement (Verso Corp)
Indebtedness. The Borrower Intermediate Dutch Holdings shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and Loan and/or any Additional Opco Revolving Facility Repayment Term LoansLoan);
(b) Indebtedness of the Borrower (i) Intermediate Dutch Holdings to Holdings and/or any Restricted Subsidiary and/or of (ii) any Restricted Subsidiary to the Borrower Holdings, Intermediate Dutch Holdings and/or any other Restricted Subsidiary; provided, that in the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party owing to any Loan Party, the Borrower, such Indebtedness shall be related Investment is permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(di) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with the Transactions, any Disposition permitted hereunder, any acquisition or other Investment permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital StockStock or any other Investment, and (ii) Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower Intermediate Dutch Holdings or any such Restricted Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary (i) as a result of or 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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(g) (i) guaranties Guarantees by the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary of the obligations of suppliers, distributors, resellers, customers, customers and licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary of Indebtedness or other obligations of the BorrowerIntermediate Dutch Holdings, any Restricted Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary)Agreement; provided, provided that in the case of any Guarantee by the Borrower any Loan Party of the obligations of any Subsidiary of the Borrower or of any joint venturenon-Loan Party, the related Investment is permitted under Section 6.06;
(i) (A) Indebtedness of the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness or commitment having an outstanding principal amount in excess of $5,000,000 10,000,000 shall be described on Schedule 6.016.01 and (B) intercompany Indebtedness outstanding on the Closing Date;
(j) Surety Bond IndebtednessIndebtedness of Restricted Subsidiaries that are not Loan Parties; provided, that the aggregate outstanding principal amount of such Indebtedness shall not exceed the greater of $246,000,000 and 50% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(k) Indebtedness of the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense license or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower Intermediate Dutch Holdings and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 123,000,000 and 3525% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Restricted Subsidiary or and/or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateInvestment; provided, that that:
(i) such Indebtedness (A) existed at the time such Person became a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofcontemplation of the applicable acquisition or similar Investment, and and
(ii) after giving effect to such Indebtedness on a Pro Forma Basis, either:
(A) (1) if such Indebtedness is First Lien Debt, the First Lien Net Leverage Ratio does not exceed the First Lien Net Leverage Ratio as of the last day of the most recently ended Test Period, (2) if such Indebtedness is Junior Lien Debt, the Secured Net Leverage Ratio does not exceed the Secured Net Leverage Ratio as of the last day of the most recently ended Test Period or (3) if such Indebtedness is not secured by the Collateral or is unsecured, the Total Net Leverage Ratio does not exceed the Total Net Leverage Ratio as of the last day of the most recently ended Test Period;
(B) Intermediate Dutch Holdings is in compliance with Section 6.10 hereof (whether or not then in effect) as of the last day of the most recently ended Test Period; or
(C) such Indebtedness is in an aggregate outstanding principal amount of such Indebtedness does outstanding not to exceed the greater of $20,000,000 100,000,000 and 2520% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower Intermediate Dutch Holdings or any Restricted Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower Intermediate Dutch Holdings or any Subsidiary subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (x), (y), (z), (bbhh) and/or (ffii) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, provided that:
(i) the principal amount of such Indebtedness does not exceed the principal amount of of, and commitments in respect of, the Indebtedness being refinanced, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (ia), (j), (m), (n), (u), (x), (yw) and/or (bbz) (other than (I) Customary Bridge Loans or Customary Term A Loansand (II) Refinancing Indebtedness that the Borrower Representative elects to apply to the Inside Maturity Amount), such Indebtedness (other than revolving indebtedness) has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Term Loan Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,;
(iii) the terms of any Refinancing Indebtedness Replacement Debt with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricingpricing (including any “MFN” provision), fees, premiums, rate floors, optional prepayment, funding discounts, maturity, amortization schedule, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, and security), are not, taken as a whole (as reasonably determined by the BorrowerBorrower Representative in good faith), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants covenant or any other provisions provision applicable only to periods after the applicable maturity date of the debt then-then being refinanced as of such date, (B) any covenants covenant or provisions provision which reflect constitutes a then-current market terms term for the applicable type of Indebtedness (as determined by the Borrower Representative in good faith), or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent Agent, pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),, it being understood and agreed that if any Replacement Debt that constitutes a revolving facility includes a financial covenant, the requirement set forth in this clause (iii) shall be satisfied if such financial covenant is added to this Agreement for the benefit of the then-existing Revolving Facility but not any then-existing Term Facility);
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (j), (m), (n), (q) (solely as it relates to the Fixed Incremental Amountn)(ii)(C), (r), (u), (w) (solely as it relates to the Fixed Shared Incremental Amount), (x), (y), (z) (solely as it relates to the Fixed Shared Incremental Amount), (bbhh) and/or (ff) (solely as it relates to the Fixed Incremental Amountii) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts amount outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,;
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01constituting Replacement Debt, (A) (1) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and (2) either (x) if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Tranche B-3 Term Loans, the Eleventh Amendment Dollar Refinancing Term Loans and the Eleventh Amendment Euro Refinancing Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Tranche B-3 Term Loans, the Eleventh Amendment Dollar Refinancing Term Loans and the Eleventh Amendment Euro Refinancing Term Loans on terms not materially less favorable (as reasonably determined by the BorrowerBorrower Representative in good faith), taken as a whole, to the Lenders than those (1I) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole whole, or (2II) set forth in any applicable relevant Intercreditor AgreementAgreement or (y) the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)); it being understood that the proceeds of any such Refinancing Indebtedness may be funded into Escrow pursuant to customary (in the good faith determination of the Borrower Representative) escrow arrangements, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that (1) any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), Indebtedness and (2) the obligation of any Person with respect to any Escrow arrangement into which the proceeds of such Refinancing Indebtedness are deposited shall not constitute a guarantee) and (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1x) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2y) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, ; and
(vi) in the case of Refinancing Indebtedness constituting Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, provided that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the asset that does not constitute Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person Restricted Subsidiary of Intermediate Dutch Holdings other than one or more Loan Parties and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) [reserved];
(r) Indebtedness incurred by the Borrower to finance of Intermediate Dutch Holdings and/or any acquisition or similar Investment permitted hereunder after the Closing Date Restricted Subsidiary in an aggregate outstanding principal amount not to exceed in 200% of the aggregate amount of Net Proceeds received by Intermediate Dutch Holdings and/or its Restricted Subsidiaries from (ai) the Fixed Incremental Amount plus issuance or sale of Qualified Capital Stock or (bii) an additional amount so long as after giving effect thereto on any Cash contribution to its common equity with the Net Proceeds from the issuance and sale by any Parent Company of its Qualified Capital Stock or a Pro Forma Basis as contribution to the Qualified Capital Stock of the last day of the most recently ended Test Periodany Parent Company, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) other than any Net Proceeds received from the MFN Provision shall apply to sale of Capital Stock to, or contributions from, Intermediate Dutch Holdings or any Incurred Acquisition Debt that constitutes MFN Indebtednessof its Restricted Subsidiaries, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Net Proceeds have not otherwise been applied to make Investments, Restricted Payments or Restricted Debt is securedPayments hereunder in reliance on a provision of Section 6.06, it may not be secured by any assets other than the Collateral (other than Section 6.04(a) or Section 6.04(b), as applicable, with respect to proceeds ofwhich such Net Proceeds were required to permit the relevant transaction and (C) other than any Cure Amount and/or any Available Excluded Contribution Amount (the amount of any Net Proceeds or contribution utilized to incur Indebtedness in reliance on this clause (r), a “Contribution Indebtedness Amount”);
(s) Indebtedness of Intermediate Dutch Holdings and/or any Restricted Subsidiary under any Derivative Transaction not entered into for speculative purposes;
(t) Indebtedness of Intermediate Dutch Holdings and/or any Restricted Subsidiary representing (i) deferred compensation to current or former directors, officers, employees, members of management, managers, and consultants of any Parent Company, Intermediate Dutch Holdings and/or any R
Appears in 2 contracts
Sources: Credit Agreement (NIQ Global Intelligence PLC), Credit Agreement (NIQ Global Intelligence LTD)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) the Secured Obligations (including and Indebtedness of any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Loan Party under the Loan Documents;
(b) [reserved];
(c) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any Person providing workers’ compensation, securing unemployment insurance and other social security laws or regulation, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other similar obligations to the Borrower or any Subsidiary Guarantor;
(d) Indebtedness of the Borrower to any Subsidiary and/or Guarantor and of any Subsidiary Guarantor to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any other Subsidiary pursuant to any such agreementGuarantor;
(e) Indebtedness in respect of the Borrower and/or any Subsidiary bids, trade contracts (i) pursuant to tendersother than for debt for borrowed money), leases (other than Capital Lease Obligations), statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customscustoms and appeal bonds, appealperformance, performance and/or and completion and return of money bonds or other bonds, government contracts, financial assurances and completion guarantees and similar obligations, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations incurred in the ordinary course of business and (ii) including Indebtedness in respect of letters of credit, bank guaranties, surety bonds, performance bonds guarantees or similar instruments in lieu of such items to support any of the foregoing itemsissuance thereof);
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise netting services, overdraft protection and similar arrangements, in each case, in connection with Cash cash management and Deposit Accountsdeposit accounts;
(g) Capital Lease Obligations and purchase money Indebtedness (including any industrial revenue bond, including incentiveindustrial development bond and similar financings) incurred by the Borrower or any Subsidiary Guarantor prior to or within two hundred seventy (270) days after the acquisition, supplier lease, repair or improvement of the respective asset in order to finance such acquisition, lease, repair or similar programsimprovement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate outstanding principal amount that at the time of, and after giving effect to, the incurrence thereof would not exceed $15 million for the Test Period most recently ended on or prior to the date of determination for which financial statements are available;
(h) the ABL Obligations; provided, however, with respect to the principal amount of any loans incurred under the ABL DIP Credit Agreement and Pre-Petition ABL Credit Agreement, the principal amount thereof shall not exceed $110,000,000.00;
(i) guaranties Guarantees (i) by the Loan Parties of the Indebtedness described in Section 6.01(h), or (ii) by the Borrower and/or or any Subsidiary Loan Party of the obligations any Indebtedness of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise Loan Party permitted to be incurred pursuant under this Agreement; provided that no Guarantee by Holdings or any of its Subsidiaries of Indebtedness described in Section 6.01(h) shall be permitted unless Holdings or the applicable Subsidiaries, as the case may be, shall have also provided a Guarantee of the Obligations under the Loan Documents on substantially the terms set forth in the applicable Guarantee of such Indebtedness or on terms acceptable to this Section 6.01 the Administrative Agent (provided, however, it being understood and agreed that the Guarantees hereunder shall only be secured by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such SubsidiaryCollateral); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or business, in each case, in accordance with the Approved Budget;
(iiik) obligations Indebtedness existing on the Closing Date and set forth on Schedule 6.01 and any Permitted Refinancing Indebtedness incurred to reacquire assets Refinance such Indebtedness;
(l) Indebtedness supported by a Letter of Credit issued under (and as defined in) the ABL DIP Credit Agreement, in a principal amount not in excess of the stated amount of such Letter of Credit;
(m) Indebtedness incurred by the Borrower and any Subsidiary Guarantor representing deferred compensation to directors, officers, employees, members of management and consultants of Holdings, any Parent Entity, the Borrower or inventory in connection with customer financing arrangements any Subsidiary Guarantor in the ordinary course of business;
(m) Indebtedness of , in each case, in accordance with the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodApproved Budget;
(n) Indebtedness in respect of (x) letters of credit, bankers’ acceptances supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business or (y) any Letter of Credit issued under (and as defined in) the ABL DIP Credit Agreement in favor of any Person that becomes a Subsidiary or Indebtedness assumed issuing bank under the ABL DIP Credit Agreement to support any Defaulting Lender’s (as defined in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (iABL DIP Credit Agreement) such Indebtedness (A) existed at participation in Letters of Credit issued under and as defined in the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodABL DIP Credit Agreement;
(o) Indebtedness consisting arising out of promissory notes issued by the Borrower or any Subsidiary to any stockholder creation of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary Lien (or their respective Immediate Family Membersother than for Liens securing debt for borrowed money) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by under Section 6.04(a)6.02;
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness the ordinary course of business in respect thereof; provided, that:
(i) the principal amount of such Indebtedness does not exceed the principal amount obligations of the Indebtedness being refinanced, refunded Borrower or replaced, except by (A) an amount equal any Subsidiary Guarantor to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discounts, other reasonable and customary fees, commissions and expenses (including upfront fees, original issue discount pay the deferred purchase price of goods or initial yield payments) incurred services or progress payments in connection with the relevant refinancing, refunding or replacement such goods and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii)services;
(q) Indebtedness unfunded pension fund and other employee benefit plan obligations and liabilities incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate ordinary course of business to the extent that they are permitted to remain unfunded under Applicable Law;
(r) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Indebtedness described in paragraphs (a) the Fixed Incremental Amount plus through (bq) an additional amount so long as after giving effect thereto on a Pro Forma Basis as above. Notwithstanding any of the last day of foregoing, other than the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, contemplated by Section 6.01(h) and as set forth in the case of any revolving indebtednessFinal Order, assuming a full utilization thereof), giving effect no Indebtedness permitted under this Section 6.01 shall be permitted to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on have an administrative expense claim status under the Collateral that is Bankruptcy Code senior to or pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness superpriority administrative expense claims of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower Administrative Agent and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofLenders.
Appears in 2 contracts
Sources: Senior Secured Super Priority Debtor in Possession Delayed Draw Term Loan Agreement (Tuesday Morning Corp/De), Debtor in Possession Delayed Draw Term Loan Agreement (Franchise Group, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(i) Indebtedness existing or committed or anticipated in the future to be outstanding on the Signing Date (provided, that any Indebtedness incurred pursuant to this clause (a)(i) in an aggregate principal amount in excess of $35,000,000 or anticipated on the Signing Date to be outstanding in the future, shall be set forth on Schedule 6.01) and (ii) Indebtedness existing or committed, or anticipated in the future to be outstanding, on the Spinoff Date (provided that any Indebtedness incurred pursuant to this clause (a)(ii) shall be permitted only if the Administrative Agent consents thereto (in its reasonable discretion) and Schedule 6.01 is updated accordingly to include such Indebtedness) and any Permitted Refinancing Indebtedness incurred to Refinance Indebtedness incurred pursuant to this clause (a); provided, that any Indebtedness outstanding pursuant to this clause (a) which is owed by a Loan Party to any Subsidiary that is not a Loan Party shall be subordinated in right of payment to the Secured Loan Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)under this Agreement on customary terms;
(b) Indebtedness created hereunder (including pursuant to Section 2.21, Section 2.22 and Section 2.23) and under the other Loan Documents and any Refinancing Notes incurred to Refinance such Indebtedness;
(c) Indebtedness of Parent or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the Borrower benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to Parent or any Subsidiary, pursuant to reimbursement or indemnification obligations to such person, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of Parent to any Subsidiary and/or and of any Subsidiary to the Borrower and/or Parent or any other Subsidiary; provided, that in the case of any (i) Indebtedness of any Subsidiary that is not a Loan Party owing to the Borrower, such Indebtedness a Loan Party incurred pursuant to this Section 6.01(e) shall be permitted as an Investment under subject to Section 6.06; provided, further, that 6.04 and (ii) Indebtedness owed by any Indebtedness of the Borrower Loan Party to any Subsidiary must that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be unsecured and expressly subordinated in right of payment to the Loan Obligations of the Borrower under this Agreement on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)customary terms;
(c) [reserved];
(df) Indebtedness arising from any agreement providing for indemnificationin respect of performance bonds, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunderbid bonds, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guarantiesappeal bonds, surety bonds, performance bonds or and completion guarantees and similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and industry practices;
(iiig) Indebtedness in respect arising from the honoring by a bank or other financial institution of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(hi) Guarantees by Indebtedness of a Subsidiary acquired after the Spinoff Date or a person merged or consolidated with Parent, any Borrower and/or or any Subsidiary of Indebtedness or other obligations of after the Borrower, any Subsidiary and/or any joint venture with respect to Spinoff Date and Indebtedness otherwise permitted assumed by any Loan Party in connection with a Permitted Acquisition; provided, that, (x) Indebtedness incurred pursuant to preceding sub clause (h)(i) shall be in existence prior to such Permitted Acquisition and shall not have been created in contemplation thereof or in connection therewith; (ii) Indebtedness incurred to finance any Permitted Acquisition after the Spinoff Date; provided that (i) before and after giving effect to such Permitted Acquisition on a Pro Forma Basis, no Default or Event of Default exists and (ii) after giving effect to such acquisition on a Pro Forma Basis, either (x) the Total Net Leverage Ratio shall not be greater than 2.25 to 1.00 or (y) the Total Net Leverage Ratio shall not be greater than the Total Net Leverage Ratio in effect immediately prior to such Permitted Acquisition and (iii) any Permitted Refinancing Indebtedness incurred to Refinance any Indebtedness incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement clause (and not prohibited to be incurred by the Borrower or such Subsidiaryh); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness (including, for the avoidance of the Borrower and/or doubt, any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in sale leaseback transactions) incurred by Parent or any Subsidiary prior to or within 360 days after the ordinary course of business;
(m) Indebtedness acquisition, lease, construction, repair, replacement or improvement of the Borrower and/or respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any Subsidiary with respect person owning such property) permitted under this Agreement in order to Capital Leases and purchase money Indebtedness finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate outstanding principal amount not that immediately after giving effect to exceed the greater incurrence of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at and the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation use of proceeds thereof, and (ii) together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(i), would not exceed the greater of $20,000,000 500,000,000 and 255.0% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower Total Assets when incurred, created or any Subsidiary to any stockholder of any Parent Company or any current or former directorassumed, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), and (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; provided, that:;
(ij) 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, penalties 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 and the related refinancing transaction, (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 definition (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),[reserved];
(iik) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity other Indebtedness of the Indebtedness being refinancedParent or any Subsidiary, refunded or replaced and (B) other than with respect to revolving Indebtednessin an aggregate principal amount that, such Refinancing Indebtedness has (x) 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 (without immediately after giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect theretothe use of proceeds thereof, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu together with the Initial Term Loans hereunder in right aggregate principal amount of payment any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $750,000,000 and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment 7.5% of Term Loans as set forth in Section 2.11(a)(i) Consolidated Total Assets when incurred, created or assumed and (y) any mandatory prepayment of Term Loans as set forth Permitted Refinancing Indebtedness in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(Dl) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower Senior Notes and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans Permitted Refinancing Indebtedness in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofthereof;
Appears in 2 contracts
Sources: Credit Agreement (Johnson Controls Inc), Credit Agreement (Adient LTD)
Indebtedness. The Borrower shall notNo Loan Party shall, nor shall it permit any of its Subsidiaries or the LS&Co. Trust to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) Indebtedness owed by the Secured U.S. Borrower or any of its Subsidiaries to the U.S. Borrower or any of its Subsidiaries; provided that (x) any Indebtedness owed by a Loan Party to a Subsidiary that is not a Loan Party shall be subordinated to the Obligations (including in the case of Indebtedness of any Additional Term Loans U.S. Loan Party) or the Canadian Obligations (in the case of Indebtedness of any Canadian Loan Party) and (y) any Additional Opco Revolving Facility Repayment Term Loans)Indebtedness owed by a U.S. Loan Party to a Canadian Loan Party shall be subordinated to the Obligations;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; providedU.S. Loan Parties issued in a Capital Markets Transaction, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, provided such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be is unsecured and expressly subordinated to such Indebtedness does not have a stated maturity date or required principal payments earlier than 91 days after the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Maturity Date;
(c) [reserved]Guarantees of the U.S. Borrower under the LS&Co. Trust Agreement; provided that the investment activities of the LS&Co. Trust are in compliance with the Investment Policies;
(d) Guarantees of (i) the U.S. Loan Parties in respect of the obligations of Loan Parties, (ii) the Canadian Loan Parties in respect of the obligations of Canadian Loan Parties and (iii) Foreign Subsidiaries that are not Loan Parties in respect of the obligations of Foreign Subsidiaries that are not Loan Parties, in each case, arising under or in connection with Banking Services in the ordinary course of business;
(e) Indebtedness of the U.S. Borrower and its Subsidiaries outstanding on the Second Amendment Effective Date and listed on Schedule 6.01 and any Permitted Refinancing Indebtedness in respect thereof; provided that intercompany Indebtedness set forth on Schedule 6.01 may not be refinanced pursuant to Section 6.01(e) with third-party Indebtedness;
(f) Indebtedness of the Loan Parties under the Loan Documents;
(g) Indebtedness of the U.S. Borrower and its Subsidiaries secured by Liens permitted by Section 6.02(c) not to exceed in the aggregate $200,000,000 at any time outstanding;
(h) Indebtedness of the U.S. Borrower or any Subsidiary in respect of Swap Agreements permitted under Section 6.07;
(i) so long as the Minimum Intercompany Transaction Requirement is met (unless pro forma Availability is not less than the greater of (x) $75.0 million and (y) 10% of the Line Cap, in which case, the Minimum Intercompany Transaction Requirement need not be met), Indebtedness (in the case of Indebtedness of (A) any U.S. Loan Party to any Subsidiary that is not a U.S. Loan Party or (B) any Canadian Loan Party to any Subsidiary that is not a Loan Party, maturing at least six months after the Maturity Date) of the U.S. Borrower and its Subsidiaries to LSIFCS or any other Affiliate of the U.S. Borrower providing services similar to the services provided by LSIFCS in the ordinary course of business and Indebtedness (in the case of Indebtedness of (A) any U.S. Loan Party to any Subsidiary that is not a U.S. Loan Party or (B) any Canadian Loan Party to any Subsidiary that is not a Loan Party, maturing at least six months after the Maturity Date) of LSIFCS or any other Affiliate of the U.S. Borrower providing services similar to the services provided by LSIFCS to the U.S. Borrower and any of its other Subsidiaries in the ordinary course of business;
(j) Indebtedness of the U.S. Borrower and its Subsidiaries in the form of Real Estate Financing Transactions and any Permitted Refinancing Indebtedness in respect thereof, provided the aggregate principal amount of all Indebtedness permitted under this Section 6.01(j) and Section 6.01(k) (including all such Indebtedness existing on the Second Amendment Effective Date and listed on Schedule 6.01) does not exceed in the aggregate $350,000,000 at any time outstanding;
(k) Indebtedness of the U.S. Borrower and its Subsidiaries in the form of Equipment Financing Transactions and any Permitted Refinancing Indebtedness in respect thereof, provided the aggregate principal amount of all Indebtedness permitted under this Section 6.01(k) and Section 6.01(j) (including all such Indebtedness existing on the Second Amendment Effective Date and listed on Schedule 6.01) does not exceed in the aggregate $350,000,000 at any time outstanding;
(l) Indebtedness arising from agreements of the U.S. Borrower or any agreement of its Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Equity Interests of a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests of a Subsidiary; provided, however, that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the U.S. Borrower or such Subsidiary in connection with such disposition;
(m) customary unsecured indemnification obligations (including contingent earn-out obligations) and other unsecured Guarantees of the U.S. Borrower incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date Permitted Foreign Receivables Transaction or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementForeign Inventory Transaction;
(en) Indebtedness of the U.S. Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness its Subsidiaries or of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise its Subsidiaries to any of its Subsidiaries in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness transactions incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) value thereof and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties and premiums (including tender premiums) thereon plus underwriting discounts, other reasonable and customary related servicing fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Credit Agreement (Levi Strauss & Co), Credit Agreement (Levi Strauss & Co)
Indebtedness. The Neither the Borrowers nor the Subsidiary Guarantors shall directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Loan Documents;
(b) Indebtedness outstanding on the Closing Date and listed on Schedule 7.03(b) and any Permitted Refinancing thereof;
(c) Guarantees by any Borrower or Subsidiary Guarantor in respect of Indebtedness of any Borrower or Subsidiary Guarantor otherwise permitted hereunder; provided that if the Indebtedness being guaranteed is subordinated to the Obligations, such Guarantee 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;
(d) Indebtedness of any Borrower or Subsidiary Guarantor owing to any Borrower or Subsidiary Guarantor (or issued or transferred to any Parent Company of a Loan Party which is substantially contemporaneously transferred to a Loan Party);
(e) Indebtedness in respect of Swap Contracts designed to hedge against any Borrower’s or Subsidiary Guarantor’s exposure to interest rates, foreign exchange rates or other commodity pricing risks incurred in the ordinary course of business and not for speculative purposes;
(f) Indebtedness representing deferred compensation to employees of any Borrower (or any Parent Company thereof) or any of its Subsidiaries incurred in the ordinary course of business;
(g) Indebtedness consisting of promissory notes issued by any Borrower or Subsidiary Guarantor to current or former officers, managers, consultants, directors and employees of any Borrower (or any Parent Company thereof) or any of its Subsidiaries, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of any Borrower or any Parent Company of such Borrower or any Subsidiary permitted by Section 7.06;
(h) Indebtedness incurred by any Borrower or Subsidiary Guarantor in connection with the Transactions or an Investment expressly permitted hereunder or any Disposition, in each case, constituting indemnification obligations or obligations in respect of purchase price (including earnouts) or other similar adjustments;
(i) Indebtedness consisting of obligations of any Borrower or Subsidiary Guarantor under deferred compensation or other similar arrangements incurred by such Person in connection with the Transactions and Investments expressly permitted hereunder;
(j) 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;
(i) Indebtedness of any Borrower or Subsidiary Guarantor, 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 $10,000,000 at such time, plus (ii) additional Indebtedness of any Borrower or Subsidiary Guarantor in an aggregate outstanding principal amount not greater than one hundred percent (100.0%) of the net cash and Cash Equivalent proceeds received by any Borrower up to such time from (x) the issuance or sale of its Qualified Equity Interests and/or (y) a contribution to its common equity with the net cash and Cash Equivalent proceeds from the issuance and sale by any Borrower (or any Parent Company of such Borrower) of its Qualified Equity Interests or a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, any Borrower or Subsidiary Guarantor and other than the proceeds of any Designated Equity Contribution), to the extent that such net cash and Cash Equivalent proceeds are Not Otherwise Applied; provided that, under Section 7.03(k)(ii), (i) the representative of the holders of each such Indebtedness becomes party, in the event that it is not already a party, to (A) if such Indebtedness is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Obligations, the Junior Lien Intercreditor Agreement as a “Senior Representative” (as defined in the Junior Lien Intercreditor Agreement), in the event that a Junior Lien Intercreditor Agreement is in effect at such time, and a First Lien Intercreditor Agreement and (B) if such Indebtedness is secured by the Collateral on a second priority (or other junior priority) basis to the Liens on the Collateral securing the Obligations, the Junior Lien Intercreditor Agreement as a “Second Priority Representative” (as defined in the Junior Lien Intercreditor Agreement), (ii) Liens securing such Indebtedness shall not attach to any assets or property of any Borrower or Subsidiary other than the Collateral, (iii) in the case of such Indebtedness secured on a pari passu basis with the Obligations, such Indebtedness shall have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities (without giving effect to any prior payments that would otherwise modify such Weighted Average Life to Maturity), (iv) in the case of such Indebtedness secured on a pari passu basis with the Obligations, such Indebtedness shall have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred and (v) with respect to any such Indebtedness in the form of syndicated term loans that is secured on a pari passu basis with the Obligations, such Indebtedness shall be subject to the MFN Protection as if such Indebtedness were an Incremental Term Loan;
(l) Indebtedness of any Borrower or Subsidiary Guarantor, in an aggregate principal amount at any time outstanding not to exceed an amount equal the amount of Cash Flow Available for Distribution determined on the date of incurrence to the extent Not Otherwise Applied; provided the Restricted Payment Conditions are satisfied; provided further that (i) the representative of the holders of each such Indebtedness becomes party, in the event that it is not already a party, to (A) if such Indebtedness is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Obligations, the Junior Lien Intercreditor Agreement as a “Senior Representative” (as defined in the Junior Lien Intercreditor Agreement), in the event that a Junior Lien Intercreditor Agreement is in effect at such time, and a First Lien Intercreditor Agreement and (B) if such Indebtedness is secured by the Collateral on a second priority (or other junior priority) basis to the Liens on the Collateral securing the Obligations, the Junior Lien Intercreditor Agreement as a “Second Priority Representative” (as defined in the Junior Lien Intercreditor Agreement), (ii) Liens securing such Indebtedness shall not attach to any assets or property of any Borrower or Subsidiary other than the Collateral, (iii) in the case of such Indebtedness secured on a pari passu basis with the Obligations, such Indebtedness shall have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities (without giving effect to any prior payments that would otherwise modify such Weighted Average Life to Maturity), (iv) in the case of such Indebtedness secured on a pari passu basis with the Obligations, such Indebtedness shall have a maturity date that is after the Latest Maturity Date at the time such Indebtedness is incurred and (v) with respect to any such Indebtedness in the form of syndicated term loans that is secured on a pari passu basis with the Obligations, such Indebtedness shall be subject to the MFN Protection as if such Indebtedness were an Incremental Term Loan;
(m) Indebtedness consisting of the financing of insurance premiums;
(n) Indebtedness incurred by any Borrower or Subsidiary Guarantor in respect of letters of credit, bank guarantees, bankers’ acceptances or similar instruments issued or created in the ordinary course of business; provided that any reimbursement obligations in respect thereof are reimbursed within thirty (30) days following the incurrence thereof;
(o) obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by any Borrower or Subsidiary Guarantor 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;
(p) Indebtedness of any Borrower or Subsidiary Guarantor in respect of one or more series of senior secured loans or notes (whether issued in a public offering, under Rule 144A of the Securities Act or in another private placement or otherwise) (and including any bridge financings in lieu of such 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, note purchase agreement or otherwise and any extensions, renewals, refinancings and replacements thereof, including in the case of any such notes, any Registered Equivalent Notes (the “Incremental Equivalent Debt”); provided that (i)(x) if the proceeds of such Indebtedness are being used to finance an acquisition, Investment, or irrevocable repayment, repurchase or redemption, no Event of Default under Sections 8.01(a) or (f) with respect to any Borrower shall nothave occurred and be continuing or would exist after giving effect to such Indebtedness, nor or (y) if otherwise, no Event of Default shall it have occurred and be continuing or would exist after giving effect to such Indebtedness, (ii) any such Incremental Equivalent Debt that is secured shall not be secured by any property or assets of any Borrower or Subsidiary Guarantor other than the Collateral, (iii) in the case of Incremental Equivalent Debt secured on a pari passu basis with the Facilities (“Incremental Equivalent First Lien Debt”), such Incremental Equivalent First Lien Debt shall have a Weighted Average Life to Maturity not shorter than the longest remaining Weighted Average Life to Maturity of the Facilities (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 Facilities or is unsecured (“Incremental Equivalent Junior Lien Debt”), such Incremental Equivalent Junior Lien Debt shall not be subject to scheduled amortization prior to the Latest Maturity Date at the time such Indebtedness is incurred; and, no Incremental Equivalent Debt shall be subject to mandatory redemption, repurchase or prepayment provisions (except customary asset sale, equity sweep, event of loss, change of control or event of default and similar provisions and, in the case of loans, excess cash flow sweeps) that could result in redemption, repurchase or prepayment prior to the Latest Maturity 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 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 (iii) and such conversion or exchange is subject only to conditions customary for similar conversions or exchange, (iv) in the case of Incremental Equivalent First Lien Debt, such Incremental Equivalent First Lien Debt shall 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, such Incremental Equivalent Junior Lien Debt shall have a maturity date that is at least ninety-one (91) days after the Latest Maturity Date at the time such Indebtedness is incurred; provided that the foregoing requirements of this clause (iv) shall not apply to the 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 this clause (iv) and such conversion or exchange is subject only to conditions customary for similar conversions or exchanges, (v) in the case of Incremental Equivalent First Lien Debt in the form of syndicated term loans, such Incremental Equivalent First Lien Debt shall be subject to the MFN Protection as if such Indebtedness were an Incremental Term Loan, (vi) the aggregate outstanding principal amount of all Incremental Equivalent Debt incurred in accordance with this Section 7.03(p), together with the aggregate principal amount of all Incremental Commitments and Incremental Term Loans shall not exceed the Incremental Availability Amount, (vii) the incurrence of any Incremental Equivalent Debt shall be in compliance with Regulation T, U and X promulgated by the FRB, (viii) the security agreements, if applicable, relating to such Indebtedness are substantially the same as the Collateral Documents (with such differences as are reasonably satisfactory to the Administrative Agent), (ix) such Indebtedness is not guaranteed other than by the Loan Parties, (x) if such Incremental Equivalent Debt is secured, the Other Debt Representative acting on behalf of the holders of such Indebtedness shall have become party to the First Lien Intercreditor Agreement and/or Junior Lien Intercreditor Agreement, as applicable, and (xi) subject to clauses (iii), (iv) and (v) above, the amortization, pricing, rate floors, discounts, fees, premiums and optional prepayment and redemption provisions applicable to such Incremental Equivalent Debt shall be determined by the Borrower Representative and the holders of such Incremental Equivalent Debt;
(q) Indebtedness supported by a letter of credit with respect to which any Borrower or Subsidiary Guarantor has any reimbursement obligations, so long as such reimbursement obligations constitute Indebtedness permitted pursuant to any other clause of this Section 7.03;
(r) Credit Agreement Refinancing Indebtedness; and
(s) all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (r) above. Notwithstanding the foregoing, no Borrower shall permit any of its Subsidiaries (other than a Loan Party or Excluded Subsidiary pursuant to clause (a) or (c) of the definition thereof) to, directly or indirectly, create, incur, assume assume, or otherwise become or remain liable suffer to exist any Indebtedness; provided, that with respect to any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) such Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other an Immaterial Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall only be permitted as if such Indebtedness is intended to promptly be transferred (by operation of law or otherwise) to a Loan Party or an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Excluded Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of the definition thereof. For purposes of determining compliance with this Section 6.017.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness described in clauses (Aa) such Indebtednessthrough (s) above, if securedthe Borrower Representative shall, is secured only by Permitted Liens at the time in its sole discretion, classify or later divide, classify or reclassify all or a portion of such refinancing, refunding item of Indebtedness or replacement (it being understood any portion thereof in a manner that secured Indebtedness may be refinanced complies with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of 7.03 and will only be required to include the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, amount and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement type of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as in one or more of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofabove clauses.
Appears in 2 contracts
Sources: Credit Agreement (GIC Private LTD), Credit Agreement (Blackstone Holdings III L.P.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness created hereunder and under the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)other Loan Documents;
(b) Indebtedness pursuant to Swap Agreements permitted by Section 6.11;
(c) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other similar obligations to the Borrower or any Restricted Subsidiary, pursuant to reimbursement or indemnification obligations to such person, provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 60 days following such incurrence;
(d) Indebtedness of the Borrower to any Subsidiary and/or and of any Subsidiary to the Borrower and/or or any other Subsidiary; providedSubsidiary (including pursuant to the Intercompany Note), provided that in the case of any (i) Indebtedness of any Subsidiary owing that is not a Subsidiary Loan Party to the Borrower, such Indebtedness Loan Parties shall be permitted as an Investment under Section 6.06; provided, further, that any 6.04 and (ii) Indebtedness of the Borrower to any Subsidiary must and Indebtedness of any other Loan Party to any Subsidiary that is not a Subsidiary Loan Party (the “Subordinated Intercompany Debt”) shall be unsecured subordinated to the Obligations pursuant to the subordination terms set forth in the Intercompany Note;
(e) Indebtedness in respect of bids, trade contracts (other than for debt for borrowed money), leases (other than Capital Lease Obligations), statutory obligations, surety, stay, customs and appeal bonds, performance, performance and completion and return of money bonds, government contracts, financial assurances and completion guarantees and similar obligations, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business (including letters of credit, bank guarantees or similar instruments in lieu of such items to support the issuance thereof);
(f) Cash Management Obligations (as defined in the First Lien Credit Agreement) and other Indebtedness in respect of netting services, overdraft protection and similar arrangements, in each case, in connection with cash management and deposit accounts;
(g) (i) Indebtedness assumed or acquired in connection with Permitted Business Acquisitions, which Indebtedness in each case, exists at the time of such Permitted Business Acquisition and is not created in contemplation of such event, the aggregate principal amount thereof at the time of such acquisition or assumption together with Indebtedness outstanding pursuant to paragraph (h) of this Section 6.01, this paragraph (g) and the Remaining Present Value of leases permitted under Section 6.03 does not exceed the greater of (x) $86.25 million and (y) an amount equal to 11.5% of the consolidated revenues of the Borrower and its Restricted Subsidiaries for the period of four fiscal quarters most recently ended on or prior to the date of determination for which financial statements are available; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(h) Capital Lease Obligations, mortgage financings and purchase money Indebtedness (including any industrial revenue bond, industrial development bond and similar financings) incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, lease, repair or improvement of the respective asset in order to finance such acquisition, lease, repair or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (g) of this Section 6.01, this paragraph (h) and the Remaining Present Value of leases permitted under Section 6.03) would not exceed the greater of (x) $86.25 million and (y) an amount equal to 11.5% of the consolidated revenues of the Borrower and its Restricted Subsidiaries for the period of four fiscal quarters most recently ended on or prior to the date of determination for which financial statements are available;
(i) Capital Lease Obligations incurred by the Borrower or any Restricted Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(j) First Lien Indebtedness and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(k) Guarantees (i) by the Subsidiary Loan Parties of the Indebtedness of the Borrower described in paragraph (j), (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness of any other Loan Party permitted to be incurred under this Agreement, (iii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party or (iv) by any Restricted Subsidiary that is not a Loan Party of Holdings and its Subsidiaries to the extent, in the case of clauses (iii) and (iv), such Guarantees are permitted by Section 6.04(b), (j), (m), (o) or (q); provided that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(k) of any other Indebtedness of a person that is subordinated to the Obligations shall be expressly subordinated to the Obligations of the Borrower on terms that are acceptable not materially less favorable to the Administrative Agent (acting at Lenders as those contained in the direction subordination of such other Indebtedness to the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Obligations;
(c) [reserved];
(dl) Indebtedness arising from agreements of the Borrower or any agreement Restricted Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including contingent earn-out obligations) , in each case, incurred or assumed in connection with the acquisition or disposition of any Disposition permitted hereunder, any acquisition permitted hereunder business or consummated prior to the Closing Date or any other purchase assets (including Equity Interests of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance Subsidiaries) of the Borrower or any Subsidiary pursuant to permitted by Section 6.04 or Section 6.05, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such agreementbusiness or assets for the purpose of financing such acquisition;
(em) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters supported by a letter of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of under the foregoing itemsFirst Lien Credit Agreement;
(fn) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or business;
(iiii) obligations Permitted Debt Securities and (ii) Permitted Refinancing Indebtedness in respect thereof; provided that, in the case of clause (i), after giving effect to reacquire assets any such incurrence, no Event of Default shall have occurred and be continuing and the Borrower shall be in compliance with the Total Leverage Ratio on a Pro Forma Basis;
(p) other Indebtedness of the Borrower or inventory any Restricted Subsidiary, in connection with customer financing arrangements an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the sum of $57.5 million plus the amount by which (A) the greater of (x) $86.25 million and (y) an amount equal to 11.5% of the consolidated revenues of the Borrower and its Restricted Subsidiaries for the period of four fiscal quarters most recently ended on or prior to the date of determination for which financial statements are available exceeds (B) the sum of all Indebtedness outstanding pursuant to paragraphs (h) and (i) of this Section 6.01 plus the Remaining Present Value of leases permitted under Section 6.03;
(q) Indebtedness existing on the Closing Date and set forth on Schedule 6.01 and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(r) letters of credit or bank guarantees (other than letters of credit issued pursuant to the First Lien Credit Agreement) having an aggregate face amount not to exceed $17.25 million outstanding at any time;
(s) Indebtedness incurred by the Borrower and its Restricted Subsidiaries representing (i) deferred compensation to directors, officers, employees, members of management and consultants of such person in the ordinary course of businessbusiness or (ii) deferred compensation or other similar arrangements in connection with the Transactions or any Permitted Business Acquisition;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(ot) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary and its Restricted Subsidiaries to any stockholder of any Parent Company or any current or former directordirectors, officerofficers, employeeemployees, member members of management, manager management or consultant consultants of any Parent Company, the Borrower or any Subsidiary such person (or their respective Immediate Family Membersestate, heirs, family members, spouse or former spouse) to finance the purchase or redemption of Capital Stock Equity Interests of any Parent Company Entity permitted by Section 6.04(a)6.05;
(pu) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; providedof letters of credit, that:
(i) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinancedbankers’ acceptances supporting trade payables, refunded warehouse receipts or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than similar facilities entered into in the case ordinary course of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (business; and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on Indebtedness described in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause paragraphs (a) of this Section 6.01, through (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1u) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 2 contracts
Sources: Credit Agreement (Generac Holdings Inc.), Credit Agreement (Generac Holdings Inc.)
Indebtedness. The Borrower shall notNo Loan Party shall, nor shall it permit any of its Subsidiaries or the LS&Co. Trust to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) Indebtedness owed by the Secured U.S. Borrower or any of its Subsidiaries to the U.S. Borrower or any of its Subsidiaries; provided that (x) any Indebtedness owed by a Loan Party to a Subsidiary that is not a Loan Party shall be subordinated to the Obligations (including in the case of Indebtedness of any Additional Term Loans U.S. Loan Party) or the Canadian Obligations (in the case of Indebtedness of any Canadian Loan Party) and (y) any Additional Opco Revolving Facility Repayment Term Loans)Indebtedness owed by a U.S. Loan Party to a Canadian Loan Party shall be subordinated to the Obligations;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; providedU.S. Loan Parties issued in a Capital Markets Transaction, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, provided such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be is unsecured and expressly subordinated to such Indebtedness does not have a stated maturity date or required principal payments earlier than six months after the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Maturity Date;
(c) [reserved]Guarantees of the U.S. Borrower under the LS&Co. Trust Agreement; provided that the investment activities of the LS&Co. Trust are in compliance with the Investment Policies;
(d) Guarantees of (i) the U.S. Loan Parties in respect of the obligations of Loan Parties, (ii) the Canadian Loan Parties in respect of the obligations of Canadian Loan Parties and (iii) Foreign Subsidiaries that are not Loan Parties in respect of the obligations of Foreign Subsidiaries that are not Loan Parties, in each case, arising under or in connection with Banking Services in the ordinary course of business;
(e) Indebtedness of the U.S. Borrower and its Subsidiaries outstanding on the Closing Date and listed on Schedule 6.01 and any Permitted Refinancing Indebtedness in respect thereof; provided that intercompany Indebtedness set forth on Schedule 6.01 may not be refinanced pursuant to Section 6.01(e) with third-party Indebtedness;
(f) Indebtedness of the Loan Parties under the Loan Documents;
(g) Indebtedness of the U.S. Borrower and its Subsidiaries secured by Liens permitted by Section 6.02(c) not to exceed in the aggregate $100,000,000 at any time outstanding;
(h) Indebtedness of the U.S. Borrower or any Subsidiary in respect of Ordinary Course Swap Agreements;
(i) so long as the Minimum Intercompany Transaction Requirement is met (unless pro forma Availability is not less than the greater of (x) $100.0 million and (y) 15% of the Line Cap, in which case, the Minimum Intercompany Transaction Requirement need not be met), Indebtedness (in the case of Indebtedness of (A) any U.S. Loan Party to any Subsidiary that is not a U.S. Loan Party or (B) any Canadian Loan Party to any Subsidiary that is not a Loan Party, maturing at least six months after the Maturity Date) of the U.S. Borrower and its Subsidiaries to LSIFCS or any other Affiliate of the U.S. Borrower providing services similar to the services provided by LSIFCS in the ordinary course of business and Indebtedness (in the case of Indebtedness of (A) any U.S. Loan Party to any Subsidiary that is not a U.S. Loan Party or (B) any Canadian Loan Party to any Subsidiary that is not a Loan Party, maturing at least six months after the Maturity Date) of LSIFCS or any other Affiliate of the U.S. Borrower providing services similar to the services provided by LSIFCS to the U.S. Borrower and any of its other Subsidiaries in the ordinary course of business;
(j) Indebtedness of the U.S. Borrower and its Subsidiaries in the form of Real Estate Financing Transactions and any Permitted Refinancing Indebtedness in respect thereof, provided the aggregate principal amount of all Indebtedness permitted under this Section 6.01(j) and Section 6.01(k) (including all such Indebtedness existing on the Effective Date and listed on Schedule 6.01) does not exceed in the aggregate $350,000,000 at any time outstanding;
(k) Indebtedness of the U.S. Borrower and its Subsidiaries in the form of Equipment Financing Transactions and any Permitted Refinancing Indebtedness in respect thereof, provided the aggregate principal amount of all Indebtedness permitted under this Section 6.01(k) and Section 6.01(j) (including all such Indebtedness existing on the Closing Date and listed on Schedule 6.01) does not exceed in the aggregate $350,000,000 at any time outstanding;
(l) Indebtedness arising from agreements of the U.S. Borrower or any agreement of its Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Equity Interests of a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests of a Subsidiary; provided, however, that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the U.S. Borrower or such Subsidiary in connection with such disposition;
(m) customary unsecured indemnification obligations (including contingent earn-out obligations) and other unsecured Guarantees of the U.S. Borrower incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date Permitted Foreign Receivables Transaction or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementForeign Inventory Transaction;
(en) Indebtedness of the U.S. Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness its Subsidiaries or of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise its Subsidiaries to any of its Subsidiaries in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness transactions incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) value thereof and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties and premiums (including tender premiums) thereon plus underwriting discounts, other reasonable and customary related servicing fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Credit Agreement (Levi Strauss & Co), Credit Agreement (Levi Strauss & Co)
Indebtedness. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) Indebtedness of (i) the Borrower to Holdings and/or any Subsidiary and/or Restricted Subsidiary, (ii) of any Subsidiary Holdings to the Borrower and/or any Restricted Subsidiary and/or (iii) of any Restricted Subsidiary to Holdings, the Borrower and/or any other Restricted Subsidiary; provided, provided that in the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party owing to the BorrowerBorrower or any Restricted Subsidiary that is a Loan Party, such Indebtedness shall be permitted as an Investment under Section 6.066.05; provided, further, that any Indebtedness of the Borrower any Loan Party to any Restricted Subsidiary that is not a Loan Party incurred in reliance on this clause (b) must be unsecured and expressly subordinated to the Obligations of the Borrower such Loan Party on terms that are reasonably acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with the Transactions, any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital StockStock or other Investments, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any such Restricted Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Restricted Subsidiary (i) as a result of or 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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Restricted Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including Banking Services Obligations and incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Restricted Subsidiary of the obligations of suppliers, distributors, resellers, customers, customers and licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into 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 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary)Agreement; provided, provided that in the case of any Guarantee by the Borrower any Loan Party of the obligations of any Subsidiary of the Borrower or of any joint venturenon-Loan Party, the related Investment is permitted under Section 6.066.05;
(i) Indebtedness of Holdings, the Borrower and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, provided that any such Indebtedness or commitment having an outstanding principal amount in excess of $5,000,000 2,500,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtednessso long as no Event of Default then exists, Indebtedness of Restricted Subsidiaries that are not Loan Parties; provided that the aggregate outstanding principal amount of such Indebtedness shall not exceed the greater of $12,500,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(k) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense license or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) so long as no Event of Default then exists, Indebtedness of the Borrower and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 12,500,000 and 3525% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Restricted Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateInvestment; provided, that provided that:
(i) no Event of Default then exists;
(ii) such Indebtedness (A) existed at the time such Person became a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and and
(iiiii) after giving effect to such Indebtedness on a Pro Forma Basis, either:
(A) the Secured Leverage Ratio does not exceed 7.50:1.00, calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period (assuming for purposes of such calculation that such Indebtedness constitutes Consolidated Secured Debt); or
(B) such Indebtedness is in an aggregate outstanding principal amount of such Indebtedness does outstanding not to exceed the greater of $20,000,000 5,000,000 and 2510% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Restricted Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a6.03(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (ru), (ur), (w), (y), and (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, 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, penalties 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 and the related refinancing transaction, (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, provided that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loansy), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Term Loan Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) has 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (other than any Indebtedness of the type described in Section 6.01(m)) (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or any other provisions provisions, taken as a whole, applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants covenant or provisions provision which reflect constitutes a then-current market terms term for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (j), (m), (n), (q) (solely as it relates to the Fixed Incremental Amountamount of such Indebtedness that may be incurred by Restricted Subsidiaries that are not Loan Parties incurred pursuant to (x) clause (i) therein and (y) the proviso to clause (ii) therein), (r), (u), (w) (solely as it relates to the Fixed Incremental Amountamount of such Indebtedness that may be incurred by Restricted Subsidiaries that are not Loan Parties incurred pursuant to (x) clause (i) therein and (y) the proviso to clause (ii) therein), (y), ) and (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Unrestricted Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts amount outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole whole, or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b6.03(b) (other than Section 6.04(b)(i6.03(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default then exists, and
(vi) in the case of Refinancing Indebtedness constituting Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, provided that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person subsidiary of the Borrower other than one or more Loan Parties and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien first lien basis with respect to the Collateral may participate in (x) in any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) in any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii2.11(b)(vi);
(q) an additional unlimited amount of Indebtedness incurred by of the Borrower and/or any Restricted Subsidiary incurred to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as as:
(i) after giving effect thereto to such acquisition or similar Investment on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtednesscredit facility then being incurred or established, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (drawing of such Indebtedness, “Incurred Acquisition Debt”revolving credit facility):
(iA) if such Acquisition Ratio Debt constitutes First Lien Debt, the First Lien Leverage Ratio does not exceed 7.50:1.00,
(B) if such Acquisition Ratio Debt constitutes Junior Lien Debt, the Secured Leverage Ratio does not exceed 7.50:1.00; or
(C) if such Indebtedness is secured by a Lien on the Collateral any asset that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the constitute Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness or is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or 8.00:1.00; and
(2ii) the Interest Coverage aggregate outstanding principal amount of Acquisition Ratio is Debt incurred in reliance on this Section 6.01(q) by Restricted Subsidiaries that are not less than 2.25:1.00Loan Parties shall not, at any time, exceed an amount equal to the greater of $15,000,000 and 30% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(iviii) provided, thatif such Acquisition Ratio Debt is issued or incurred by any Loan Party and consists of third party Indebtedness for borrowed money:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, andfinal maturity date of such Indebtedness is no earlier than the Latest Term Loan Maturity Date on the date of the issuance or incurrence thereof,
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be Indebtedness is no shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;Loans,
(DC) subject to clause (1) above, if such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt Indebtedness is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofno
Appears in 2 contracts
Sources: Credit Agreement (Definitive Healthcare Corp.), Credit Agreement (Definitive Healthcare Corp.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Closing Date and set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower other Loan Documents and any Permitted Refinancing Indebtedness incurred to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, Refinance such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Swap Agreements permitted by Section 6.12;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business; provided, that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing 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 ordinary course of business Loan Parties shall be subject to Section 6.04(b) and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any Indebtedness of the foregoing itemsBorrower to Holdings or any Subsidiary and Indebtedness of any other Loan Party to Holdings or any Subsidiary that is not a Subsidiary Loan Party (the “Subordinated Intercompany Debt”) shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;
(iig) Indebtedness incurred 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 or other cash management services in the ordinary course of business; provided, that (x) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to the Borrower of its incurrence and (y) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged into or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided that (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) immediately after giving effect to such acquisition, merger or consolidation, the assumption and incurrence of any Indebtedness and any related transactions, the Borrower shall be in Pro Forma Compliance;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the Remaining Present Value of outstanding leases permitted under Section 6.03, would not exceed the greater of $75.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(j) Capital Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease Back Transaction that is permitted under Section 6.03;
(k) other Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $75.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(l) Indebtedness of the Borrower pursuant to (i) the Second Lien Notes in an aggregate principal amount that is not in excess of $600.0 million, (ii) the Senior Subordinated Notes in an aggregate principal amount that is not in excess of $300.0 million, (iii) the Senior Secured Notes in an aggregate principal amount that is not in excess of $325 million and (iv) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(m) Guarantees (i) by the Subsidiary Loan Parties of the Indebtedness of the Borrower described in paragraph (1) of this Section 6.01, so long as the Guarantee of the Senior Subordinated Notes or any Permitted Refinancing Indebtedness in respect thereof is subordinated substantially on terms as set forth in the Senior Subordinated Notes Indenture with respect to the Senior Subordinated Notes, and so long as any Liens securing the Guarantee of the Second Lien Notes or any Permitted Refinancing Indebtedness in respect thereof are subject to the Intercreditor Agreement, (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (iii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of Holdings or any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iv) by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary, and (v) by the Borrower of Indebtedness of Foreign Subsidiaries incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(s) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Obligations to at least the same extent as the Guarantee of the Senior Subordinated Notes is under the Senior Subordinated Notes Indenture;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the Transactions and any Permitted Business Acquisition or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(o) Indebtedness in respect of (A) letters of credit, bank guarantees, warehouse receipts or similar instruments issued to support performance obligations (other than obligations in respect of other Indebtedness) in the ordinary course of business or (B) letters of credit issued in favor of the Swingline Lender or the Issuing Bank pursuant to arrangements designed to eliminate such Swingline Lender’s or Issuing Bank’s risk with respect to a Defaulting Lender’s participation in Swingline Loans or Letters of Credit, respectively, as contemplated by Section 2.04(a) or 2.05(a), respectively;
(p) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit;
(q) Indebtedness consisting of (i) the financing of insurance premiums or (ii) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(r) Indebtedness consisting of Permitted Additional Debt and Permitted Refinancing Indebtedness in respect thereof so long as (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (ii) immediately after giving effect to the issuance, incurrence or assumption of such Indebtedness, the Total Net First Lien Leverage Ratio on a Pro Forma Basis shall not be greater than 3.00 to 1.00;
(s) Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed $50.0 million outstanding at any time;
(t) unsecured Indebtedness in respect of obligations of the Borrower and/or or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services services; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligations) in the ordinary course of business and not in connection with the borrowing of money or any Swap Agreements;
(iiiu) Indebtedness in respect representing deferred compensation to employees of letters of credit, bankers’ acceptances, bank guaranties the Borrower or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into any Subsidiary incurred in the ordinary course of business;
(hv) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture in connection with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Permitted Receivables Financings;
(iw) Indebtedness of the Borrower and/or any Subsidiary existingand the Subsidiaries incurred under lines of credit or overdraft facilities (including, but not limited to, intraday, ACH and purchasing card/T&E services) extended by one or pursuant more financial institutions reasonably acceptable to commitments existingthe Administrative Agent or one or more of the Lenders and (in each case) established for the Borrower’s and the Subsidiaries’ ordinary course of operations (such Indebtedness, on the Closing Date; provided“Overdraft Line”), which Indebtedness may be secured as, but only to the extent, provided in Section 6.02(b) and in the Security Documents (it being understood, however, that any such Indebtedness in excess for a period of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness 30 consecutive days during each fiscal year of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does under the Overdraft Line shall not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a10.0 million);
(px) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses all premium (aif any), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties and premiums interest (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 and the related refinancing transaction, (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 definition (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 6.02post petition interest),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiumsexpenses, rate floors, optional prepayment, redemption terms charges and additional or subordination terms and, with respect to Refinancing Indebtedness incurred contingent interest on obligations described in respect of Indebtedness permitted under clause paragraphs (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), through (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 2 contracts
Sources: Credit Agreement (Verso Paper Corp.), Credit Agreement (Verso Paper Corp.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing on the Secured Obligations Closing Date (including other than any Additional Term Loans Indebtedness of Parent or any Subsidiary owed to Parent or any Subsidiary); provided that any Indebtedness that is in excess of $2,000,000 individually or $10,000,000 in the aggregate shall be permitted under this clause (a)(i) only if such Indebtedness is set forth on Schedule 6.01 and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance Indebtedness permitted by the foregoing subclause (i);
(b) Indebtedness under the other Loan Documents;
(c) Indebtedness (if any) deemed to exist with respect to Swap Agreements not entered into for speculative purposes and under Cash Management Agreements;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the Borrower benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to Parent or any Subsidiary, pursuant to reimbursement or indemnification obligations to such person, in each case in the ordinary course of business; provided, that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of Parent owed to any Subsidiary and/or and of any Subsidiary owed to the Borrower and/or Parent or any other Subsidiary; provided, that other than in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, tax and accounting operations of Parent and the Subsidiaries, (i) any Indebtedness owed by a Loan Party to a Subsidiary that is not a Loan Party shall be evidenced by (x) the Global Intercompany Note or (y) another promissory note containing substantially similar subordination provisions and (ii) any Indebtedness owed by a Subsidiary that is not a Loan Party to a Loan Party may be evidenced by the Global Intercompany Note;
(f) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case outstanding on the Closing Date or otherwise provided in the ordinary course of business (whether or not consistent with past practices) of Parent and the Subsidiaries, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;
(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 or other cash management services in the ordinary course of business;
(A) Indebtedness of any Loan Party and Acquired Indebtedness of Parent or any Subsidiary; provided that (i) no Event of Default shall have occurred or be continuing or would result from the incurrence or existence of such additional Indebtedness or from the application of proceeds thereof, (ii) the Total Net Leverage Ratio shall not exceed 5.00:1.00 calculated on a Pro Forma Basis as of the Borrower and/or last day of the most recently ended Test Period, (iii) other than in the case of Acquired Indebtedness, the final maturity date of such Indebtedness shall be no earlier than six months following the then Latest Maturity Date (other than customary offers to repurchase upon a change of control, asset sale or event of loss (so long as, in the case of a change of control offer to purchase provision, a change of control would not be triggered thereunder unless a Change of Control is also triggered hereunder, and in the case of an asset sale or event of loss offer to purchase provision, the net proceeds of any asset sale are permitted to be applied to the prepayment of the Loans first or, in the case of Indebtedness secured by Other First Liens, on a not less than ratable basis than such Indebtedness) and customary acceleration rights after an event of default), (iv) other than in the case of Acquired Indebtedness, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than the remaining Weighted Average Life to Maturity of the existing Term B Loans and (v) other than in the case of Acquired Indebtedness, the covenants, events of default, guarantees and other terms of such Indebtedness (other than pricing and redemption premiums), taken as a whole, shall not be more restrictive to Parent and the Subsidiaries than those set forth in this Agreement; provided that a certificate of the Chief Financial Officer of Parent delivered to the Administrative Agent in good faith at least three Business Days (or such shorter period as the Administrative Agent may reasonably agree) 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 Parent has determined in good faith that such terms and conditions satisfy the requirement in this subclause (v) shall be conclusive evidence that such terms and conditions satisfy the requirement in this subclause (v) and (B) Permitted Refinancing Indebtedness in respect of Indebtedness permitted by the foregoing clause (A);
(i) mortgage financings and other purchase money Indebtedness incurred by Parent or any Subsidiary prior to pay or within 270 days after the deferred acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase price of goods property or services the Equity Interests of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or progress payments improvement and Capital Lease Obligations of Parent or any Subsidiary, in each case, so long as (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) the aggregate principal amount of such Indebtedness at any time outstanding does not exceed the greater of (X) $75,000,000 and (Y) at the time of any incurrence under this paragraph (i), 37.5% of the EBITDA on a Pro Forma Basis for the Test Period most recently ended;
(j) other Indebtedness of Parent or any Subsidiary in an aggregate principal amount at any time outstanding that does not exceed the greater of (X) $100,000,000 and (Y) at the time of any incurrence under this paragraph (j), 50% of the EBITDA on a Pro Forma Basis for the Test Period most recently ended;
(k) Guarantees (i) by any Loan Party of any Indebtedness of any other Loan Party permitted to be incurred under this Agreement, (ii) by any Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Loan Party to the extent such Guarantees are permitted by Section 6.04(b)(iii), and (iii) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party; provided, that Guarantees by any Loan Party under this paragraph (k) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be subordinated to the Obligations to at least the same extent such other Indebtedness is so subordinated;
(l) Indebtedness arising from agreements of Parent or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price, earnouts or similar obligations, in each case, incurred or assumed in connection with any Permitted Business Acquisition or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such goods and services and business, assets or a Subsidiary for the purpose of financing such acquisition; provided, that in respect of the disposition of any business, assets or a Subsidiary, such Indebtedness shall not exceed the proceeds of such disposition;
(iiim) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practice;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(in) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or business;
(iiio) Indebtedness of Subsidiaries that are not Loan Parties in an aggregate amount not to exceed at any time outstanding the greater of (X) $40,000,000 and (Y) at the time of any incurrence under this paragraph (o), 20% of EBITDA on a Pro Forma Basis for the Test Period most recently ended;
(p) unsecured Indebtedness constituting obligations of Parent or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing such goods and services; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 90 days after the incurrence of the related obligations) in the ordinary course of business and not in connection with the borrowing of money or any Swap Agreements;
(i) secured Indebtedness of Subsidiary Loan Parties under local lines of credit in the ordinary course of business and consistent with past practices and (ii) Indebtedness of Parent and its Subsidiaries incurred in the ordinary course of business under overdraft facilities (including, but not limited to, intraday, ACH and purchasing card/T&E services), in each case, extended by one or more financial institutions reasonably acceptable to the Administrative Agent or by one or more of the Lenders or L/C Issuers or their Affiliates and (in each case) established for Parent’s and the Subsidiaries’ ordinary course of operations;
(r) (i) Specified Prepayment Debt the Net Proceeds of which are applied solely to the prepayment of Loans in accordance with Section 2.12(b) and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(s) Indebtedness consisting of Indebtedness issued by Parent or any Subsidiary to current or former officers, directors and employees, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of Parent permitted by Section 6.06;
(t) Indebtedness consisting of obligations of Parent or any Subsidiary to any of their employees under deferred compensation or other similar arrangements incurred by such person in connection with Permitted Business Acquisitions or any other Investment permitted hereunder or in the ordinary course of business;
(mu) Indebtedness of the Borrower and/or Parent or any Subsidiary to any joint venture (regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (including with respect to Capital Leases intercompany self insurance arrangements) of Parent and purchase money Indebtedness the Subsidiaries;
(i) Incremental Equivalent Debt in an aggregate outstanding principal amount at any time outstanding not to exceed exceed, together with the greater aggregate amount of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder Incremental Commitments made after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, Incremental Amount and (ii) Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness incurred pursuant to subclause (i);
(w) Indebtedness of joint ventures and/or, without duplication, Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures, of Parent or any Subsidiary not in excess, at any one time outstanding, of the aggregate greater of (X) $100,000,000 and (Y) at the time of any incurrence pursuant to this paragraph (w), 50% of the EBITDA on a Pro Forma Basis for the Test Period most recently ended;
(x) Settlement Indebtedness;
(y) Customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business; and
(z) all premium (if any, including tender premiums), expenses, defeasance costs, interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in paragraphs (a) through (y) above. For purposes of determining compliance with this Section 6.01, the amount of any Indebtedness denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of such Indebtedness incurred on or prior to the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred after the Closing Date, on the date that such Indebtedness was incurred; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (or in a different currency from the Indebtedness being refinanced), and such refinancing 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 refinancing, 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 (i) the outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
being refinanced plus (o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(iii) the principal aggregate amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinancedfees, refunded or replacedunderwriting discounts, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discounts), defeasance costs and other reasonable and customary fees, commissions costs and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant such refinancing, refunding or replacement and the related refinancing transaction, (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 definition (with additional amounts incurred in reliance on this clause (C) constituting a utilization . For purposes of the relevant basket or exception pursuant to which such additional amount is permitted) and (2) if such additional Indebtedness is securedforegoing, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) a Weighted Average Life Parent may elect to Maturity equal treat the full committed amount to or greater than be incurred at the Weighted Average Life to Maturity of date the Indebtedness being refinanced, refunded or replaced (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed commitment becomes effective (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior effective date was prior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofClosing Date).
Appears in 2 contracts
Sources: Credit Agreement (EVERTEC, Inc.), Credit Agreement (EVERTEC, Inc.)
Indebtedness. The Borrower shall will not, nor shall it and will not permit any of its Subsidiaries other Group Member to, directly or indirectlyincur, create, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) the Loans or other Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Obligations;
(b) Indebtedness of the Borrower to Group Members existing on the date hereof set forth on Schedule 9.02 as well as any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that Permitted Refinancing Indebtedness in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)respect thereof;
(c) [reserved]purchase money Indebtedness or Capital Lease Obligations not to exceed $30,000,000 in the aggregate at any one time outstanding;
(d) unsecured Indebtedness arising from any agreement providing for indemnificationassociated with worker’s compensation claims, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower surety obligations required by Governmental Requirements or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred third parties in the ordinary course of business in respect of obligations connection with the operation of, or provision for the abandonment and remediation of, the Oil and Gas Properties;
(e) (i) Indebtedness among the Borrower and its Subsidiaries which are Loan Parties, (ii) Indebtedness between the Subsidiaries of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services which are not Loan Parties and (iii) Indebtedness in respect extended to the Borrower and its Subsidiaries which are Loan Parties by any Group Members; provided that (A) such Indebtedness is not held, assigned, transferred, negotiated or pledged to any Person other than a Loan Party and (B) any such Indebtedness owed by either the Borrower or a Guarantor shall be subordinated to the Secured Obligations on terms satisfactory to the Administrative Agent;
(f) endorsements of letters of credit, bankers’ acceptances, bank guaranties or similar negotiable instruments supporting trade payables, warehouse receipts or similar facilities entered into for collection in the ordinary course of business;
(hg) Guarantees by the Borrower and/or any Subsidiary guarantee of any other Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this hereunder;
(h) unsecured Indebtedness in respect of Swap Agreements entered into in compliance with Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.069.17;
(i) Indebtedness of the Borrower and/or in respect of Permitted Unsecured Debt and any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any Permitted Refinancing Indebtedness of such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness does not exceed $500,000,000 of principal in the aggregate outstanding at any time and (ii) giving pro forma effect to such Indebtedness and the repayment of any other Indebtedness with the proceeds thereof, (A) existed no Default, Event of Default or Borrowing Base Deficiency exists at such time, (B) the time such Person became a Subsidiary or ratio of Total Net Debt to EBITDAX for the assets subject to such Indebtedness were acquired most recent four Fiscal Quarters for which financial statements are available is in compliance with Section 9.01(a) and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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 Availability is permitted) and (2) if such additional Indebtedness is secured, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, 15%; and
(vij) in the case of Replacement Debt, (A) such other Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed $15,000,000 in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of at any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofone time outstanding.
Appears in 2 contracts
Sources: Revolving Credit Agreement (Diversified Energy Co PLC), Revolving Credit Agreement (Diversified Energy Co PLC)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Closing Date and set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Swap Agreements permitted by Section 6.13;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers' compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party 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 ordinary course of business any Loan Party shall be subject to Section 6.04(b) and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any Indebtedness of the foregoing itemsBorrower to any Subsidiary and Indebtedness of any other Loan Party to any Subsidiary that is not a Subsidiary Loan Party shall be subordinated to the Obligations;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise performance bonds, bid bonds, appeal bonds, surety bonds, financial assurances and completion guarantees and similar obligations, in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, (ii) Indebtedness including those incurred in the ordinary course of business in respect of to secure health, safety and environmental obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(hg) Guarantees Indebtedness arising from the honoring by the Borrower and/or any Subsidiary of Indebtedness a bank or other obligations financial institution of a check, draft or similar instrument drawn against insufficient funds in the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, ordinary course of business or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that cash management services in the case ordinary course of any Guarantee by the Borrower business; provided that (x) such Indebtedness (other than credit or purchase cards) is extinguished within five Business Days of the obligations its incurrence and (y) such Indebtedness in respect of any Subsidiary of the Borrower credit or of any joint venture, the related Investment purchase cards is permitted under Section 6.06extinguished within 60 days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a corporation merged into or consolidated with the Borrower and/or or any Subsidiary existingafter the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided that the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger or consolidation, such assumption or such incurrence, as applicable (together with Indebtedness outstanding pursuant to commitments existingthis paragraph (h) and paragraph (i) of this Section 6.01), would not exceed the greater of $50.0 million and 4.25% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition, merger or consolidation, such assumption or such incurrence, as applicable, for which financial statements have been delivered pursuant to Section 5.04, determined on a Pro Forma Basis;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Closing Date; providedBorrower or any Subsidiary prior to or within 270 days after the acquisition, that lease or improvement of the applicable asset permitted under this Agreement in order to finance such acquisition or improvement, and any such Permitted Refinancing Indebtedness in excess respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (h) of this Section 6.01 and this paragraph (i)) would not exceed the greater of $5,000,000 shall be described 50.0 million and 4.25% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, determined on Schedule 6.01a Pro Forma Basis;
(j) Surety Bond IndebtednessCapital Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) other Indebtedness of the Borrower and/or or any Subsidiary consisting Subsidiary, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in $50.0 million and 4.25% of Consolidated Total Assets as of the ordinary course end of businessthe fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(l) Guarantees (i) by any Loan Party of the Indebtedness of the Borrower and/or referred to in paragraph (l) or any Permitted Refinancing Indebtedness in respect thereof, (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party expressly permitted to be incurred under this Agreement, (iii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04(b) and (iv) by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary; provided that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(l) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to such other Indebtedness to the same extent;
(m) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business or assets of the Borrower or a Subsidiary, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(n) letters of credit or bank guarantees (other than Letters of Credit issued pursuant to Section 2.05) having an aggregate face amount not in excess of $5.0 million at any time outstanding;
(o) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit; provided that such Indebtedness is promptly repaid with the proceeds of any drawing on such Letter of Credit;
(p) Indebtedness consisting of (ix) the financing of insurance premiums, premiums or (iiy) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date of Foreign Subsidiaries in an outstanding principal aggregate amount not to exceed $25.0 million at any time outstanding;
(r) unsecured Indebtedness consisting of Permitted Junior Debt and Permitted Refinancing Indebtedness in the aggregate respect thereof;
(s) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in paragraphs (a) the Fixed Incremental Amount plus through (bq) an additional amount so long as after giving effect thereto on a Pro Forma Basis as above; and
(t) Cash Management Obligations and other Indebtedness in respect of the last day of the most recently ended Test Periodnetting services, including the application of the proceeds thereof (overdraft protection and similar arrangements, in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith with cash management and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofdeposit accounts.
Appears in 2 contracts
Sources: Credit Agreement (Nuance Communications, Inc.), Credit Agreement (Nuance Communications, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to tendersthe Loan Parties shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Loan Obligations under this Agreement on subordination terms substantially in the form of Exhibit J hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, ;
(iig) Indebtedness incurred 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 or other cash management services, in each case incurred the ordinary course of business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement; provided, that, (w) in the case of Indebtedness secured by Liens on the Collateral ranking pari passu with the Liens on the Collateral securing the Loans, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and any related transactions is (I) not greater than 4.00 to 1.00 or (II) no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, (x) in the case of Indebtedness secured by Liens on the Collateral that rank junior to the Liens on the Collateral securing the Loans, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and any related transactions is (I) not greater than 4.75 to 1.00 or (II) no greater than the Net Secured Leverage Ratio in effect immediately prior thereto, (y) in the case of other Indebtedness, the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and any related transactions is (I) not greater than 5.25 to 1.00 or (II) no greater than the Total Net Leverage Ratio in effect immediately prior thereto and (z) the aggregate outstanding principal amount of Indebtedness permitted under this clause (h) incurred by a Subsidiary other than a Subsidiary Loan Party, together with the aggregate principal amount of Indebtedness of a Subsidiary other than a Subsidiary Loan Party then outstanding pursuant to Section 6.01(t), shall not exceed the greater of $100,000,000 and 4% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b); provided that the incurrence of any Indebtedness for borrowed money pursuant to this clause (h)(i) incurred in contemplation of such acquisition, merger or consolidation (except for any seller note or other seller financing) shall be subject to the last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed (A) the greater of $150,000,000 and 5.75% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b) plus (B) any additional amounts, so long as immediately after giving effect to the incurrence of such additional amounts under this clause (B) and the use of proceeds thereof, the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 5.75 to 1.0, and (y) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations incurred by the Borrower or any Subsidiary in respect of obligations any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) other Indebtedness of the Borrower and/or or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $175,000,000 and 7.5% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b), and any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness secured by Liens on the Collateral that rank junior to the Liens on the Collateral securing the Loans so long as immediately after giving effect to the issuance or incurrence of such Indebtedness and the use of proceeds thereof, the Net Secured Leverage Ratio on a Pro Forma Basis is not greater than 4.75 to 1.00; provided, that the incurrence of debt for borrowed money pursuant to this clause (l)(i) shall be subject to the last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to pay be incurred under this Agreement, (ii) by the deferred Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness business or other obligations of the Borrower, any Subsidiary and/or any joint venture consistent with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower past practice or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06industry practices;
(i) Indebtedness in respect of the Borrower and/or First Lien Notes in an aggregate principal amount outstanding not to exceed $800,000,000 and (ii) any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Permitted Refinancing Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01respect thereof;
(j) Surety Bond Indebtedness;
(kq) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(i) Indebtedness secured by Liens on the Collateral ranking pari passu with the Liens on the Collateral securing the Loans so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 4.00 to 1.00 (but without netting any of the net cash proceeds thereof); provided, that the incurrence of debt for borrowed money pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) unsecured Indebtedness so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the net cash proceeds thereof), the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 5.25 to 1.00; provided, that (x) the aggregate principal amount of unsecured Indebtedness outstanding under this clause (s)(i) incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed the greater of $100,000,000 and 4% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b) and (y) the incurrence of debt for borrowed money pursuant to this clause (s)(i) shall be subject to the last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(t) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t) and pursuant to clause (z) of Section 6.01(h), would not exceed the greater of $100,000,000 and 4% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b), and any Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness incurred in the ordinary course of business and/or (iii) in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements 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 or any Hedging Agreements.
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower (or, to the extent such work is done for the Borrower or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(mw) Indebtedness in connection with Permitted Receivables Financings;
(x) obligations in respect of the Borrower and/or Cash Management Agreements;
(y) Refinancing Notes and any Subsidiary with Permitted Refinancing Indebtedness incurred in respect to Capital Leases and purchase money thereof;
(i) Indebtedness in an aggregate outstanding principal amount not to exceed at the greater time of $52,850,000 and 35% of Consolidated Adjusted EBITDA as incurrence an amount equal to the amount determined pursuant to clause (i) of the last day definition of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateIncremental Amount at such time; provided, that (ix) there shall be no obligor in respect of any such Indebtedness that is not a Loan Party and (Ay) existed at the time such Person became a Subsidiary or the assets incurrence of debt for borrowed money pursuant to this clause (z)(i) shall be subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofthe last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(aa) [Reserved];
(bb) Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(bb), would not exceed the greater of $20,000,000 100,000,000 and 254% of Consolidated Adjusted EBITDA Total Assets as of the last day fiscal quarter immediately prior to the date of the most recently ended Test Periodsuch Investment for which financial statements have been delivered pursuant to Section 5.04(a) or 5.04(b), and any Permitted Refinancing Indebtedness in respect thereof;
(occ) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pdd) Indebtedness refinancing, refunding consisting of obligations of the Borrower or replacing any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(ee) Indebtedness permitted under clauses of the Borrower or any Subsidiary to or on behalf of any joint venture (a), regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bbincluding with respect to intercompany self-insurance arrangements) and/or of the Borrower and its Subsidiaries;
(ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:[Reserved];
(igg) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the principal stated amount of such Indebtedness does not exceed the principal amount Letter of the Indebtedness being refinancedCredit; and
(hh) all premium (if any, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discountsexpenses, other reasonable and customary defeasance costs, interest (including post-petition interest), fees, commissions expenses, charges and expenses additional or contingent interest on obligations described in clauses (including upfront fees, original issue discount a) through (gg) above or initial yield payments) incurred in connection refinancings thereof; and For purposes of determining compliance with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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 secured6.01, the Lien securing such amount of any Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (andeffect, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred (in respect of Indebtedness permitted under clause term Indebtedness) or committed (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (arevolving Indebtedness) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding on or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated prior to the Liens on the Collateral securing the Initial Term LoansClosing Date, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofon
Appears in 2 contracts
Sources: First Lien Credit Agreement (McGraw-Hill Interamericana, Inc.), First Lien Credit Agreement (McGraw-Hill Global Education LLC)
Indebtedness. The Borrower shall notNo Loan Party shall, nor shall it permit any of its Subsidiaries or the LS&Co. Trust to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) Indebtedness owed by the Secured U.S. Borrower or any of its Subsidiaries to the U.S. Borrower or any of its Subsidiaries; provided that (x) any Indebtedness owed by a Loan Party to a Subsidiary that is not a Loan Party shall be subordinated to the Obligations (including in the case of Indebtedness of any Additional Term Loans U.S. Loan Party) or the Canadian Obligations (in the case of Indebtedness of any Canadian Loan Party) and (y) any Additional Opco Revolving Facility Repayment Term Loans)Indebtedness owed by a U.S. Loan Party to a Canadian Loan Party shall be subordinated to the Obligations;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; providedU.S. Loan Parties issued in a Capital Markets Transaction, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, provided such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be is unsecured and expressly subordinated to such Indebtedness does not have a stated maturity date or required principal payments earlier than 91 days after the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Maturity Date;
(c) [reserved]Guarantees of the U.S. Borrower under the LS&Co. Trust Agreement; provided that the investment activities of the LS&Co. Trust are in compliance with the Investment Policies;
(d) Guarantees of (i) the U.S. Loan Parties in respect of the obligations of Loan Parties, (ii) the Canadian Loan Parties in respect of the obligations of Canadian Loan Parties and (iii) Foreign Subsidiaries that are not Loan Parties in respect of the obligations of Foreign Subsidiaries that are not Loan Parties, in each case, arising under or in connection with Banking Services in the ordinary course of business;
(e) Indebtedness of the U.S. Borrower and its Subsidiaries outstanding on the Second Amendment and Restatement Effective Date and listed on Schedule 6.01 and any Permitted Refinancing Indebtedness in respect thereof; provided that intercompany Indebtedness set forth on Schedule 6.01 may not be refinanced pursuant to Section 6.01(e) with third-party Indebtedness;
(f) Indebtedness of the Loan Parties under the Loan Documents;
(g) Indebtedness of the U.S. Borrower and its Subsidiaries secured by Liens permitted by Section 6.02(c) not to exceed in the aggregate $200,000,000 at any time outstanding;
(h) Indebtedness of the U.S. Borrower or any Subsidiary in respect of Swap Agreements permitted under Section 6.07;
(i) so long as the Minimum Intercompany Transaction Requirement is met (unless pro forma Availability is not less than the greater of (x) $75.0 million and (y) 10% of the Line Cap, in which case, the Minimum Intercompany Transaction Requirement need not be met), Indebtedness (in the case of Indebtedness of (A) any U.S. Loan Party to any Subsidiary that is not a U.S. Loan Party or (B) any Canadian Loan Party to any Subsidiary that is not a Loan Party, maturing at least six months after the Maturity Date) of the U.S. Borrower and its Subsidiaries to LSIFCS or any other Affiliate of the U.S. Borrower providing services similar to the services provided by LSIFCS in the ordinary course of business and Indebtedness (in the case of Indebtedness of (A) any U.S. Loan Party to any Subsidiary that is not a U.S. Loan Party or (B) any Canadian Loan Party to any Subsidiary that is not a Loan Party, maturing at least six months after the Maturity Date) of LSIFCS or any other Affiliate of the U.S. Borrower providing services similar to the services provided by LSIFCS to the U.S. Borrower and any of its other Subsidiaries in the ordinary course of business;
(j) Indebtedness of the U.S. Borrower and its Subsidiaries in the form of Real Estate Financing Transactions and any Permitted Refinancing Indebtedness in respect thereof, provided the aggregate principal amount of all Indebtedness permitted under this Section 6.01(j) and Section 6.01(k) (including all such Indebtedness existing on the Second Amendment and Restatement Effective Date and listed on Schedule 6.01) does not exceed in the aggregate $350,000,000 at any time outstanding;
(k) Indebtedness of the U.S. Borrower and its Subsidiaries in the form of Equipment Financing Transactions and any Permitted Refinancing Indebtedness in respect thereof, provided the aggregate principal amount of all Indebtedness permitted under this Section 6.01(k) and Section 6.01(j) (including all such Indebtedness existing on the Second Amendment and Restatement Effective Date and listed on Schedule 6.01) does not exceed in the aggregate $350,000,000 at any time outstanding;
(l) Indebtedness arising from agreements of the U.S. Borrower or any agreement of its Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Equity Interests of a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Equity Interests of a Subsidiary; provided, however, that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the U.S. Borrower or such Subsidiary in connection with such disposition;
(m) customary unsecured indemnification obligations (including contingent earn-out obligations) and other unsecured Guarantees of the U.S. Borrower incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date Permitted Foreign Receivables Transaction or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementForeign Inventory Transaction;
(en) Indebtedness of the U.S. Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness its Subsidiaries or of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise its Subsidiaries to any of its Subsidiaries in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness transactions incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) value thereof and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties and premiums (including tender premiums) thereon plus underwriting discounts, other reasonable and customary related servicing fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Credit Agreement (Levi Strauss & Co), Credit Agreement (Levi Strauss & Co)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $1,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to tendersthe Loan Parties shall be subject to Section 6.04(b) and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit K hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and industry practices;
(iiig) Indebtedness in respect arising from the honoring by a bank or other financial institution of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(h) [Reserved];
(i) Capitalized Lease Obligations and mortgage financings incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate amount of any other Indebtedness outstanding pursuant to this Section 6.01(i), would not exceed the greater of $5,000,000 and 0.046 times EBITDAR calculated on a Pro Forma Basis for the then most recently ended Test Period and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) [Reserved];
(l) [Reserved];
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (ii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred hereunder to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower and/or or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to Loan Party under this Section 6.01 by 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations under this Agreement to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or such Subsidiaryany Subsidiary providing for indemnification, as applicableadjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the Transactions, any Permitted Business Acquisition, other obligations Investments or the disposition of the Borrower and/or any business, assets or a Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Agreement;
(io) Indebtedness in respect of the Borrower and/or any Subsidiary existingletters of credit, or pursuant to commitments existingbank guarantees, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense warehouse receipts or similar agreements entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(lp) Indebtedness to finance the acquisition or ownership of the Borrower and/or any Subsidiary aircrafts and aircraft equipment (including airframes, engines, appliances, equipment, instruments or related property), including (x) Capitalized Lease Obligations and (y) transactions through equipment trust certificates or enhanced equipment trust certificates structures;
(q) Indebtedness consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(r) other unsecured Indebtedness or Indebtedness secured by Liens on the Collateral that are junior to, the Liens securing the Loan Obligations in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate amount of any other Indebtedness outstanding pursuant to this Section 6.01(r), would not exceed $10,000,000, and any Permitted Refinancing Indebtedness in respect thereof;
(s) [Reserved];
(t) [Reserved];
(u) Indebtedness incurred in the ordinary course of business and/or (iii) in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements 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 or any Hedging Agreements;
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower (or, to the extent such work is done for the Borrower or the Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(mw) Indebtedness obligations in respect of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodCash Management Agreements;
(nx) [Reserved];
(y) [Reserved];
(z) [Reserved];
(aa) Indebtedness incurred on behalf of, or representing Guarantees of any Person Indebtedness of, joint ventures that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or of, and after giving effect to, the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation incurrence thereof, and (ii) together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(aa), would not exceed the greater of $20,000,000 5,000,000 and 25% of Consolidated Adjusted EBITDA as of 0.046 times EBITDAR calculated on a Pro Forma Basis for the last day of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(obb) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pcc) Indebtedness refinancing, refunding consisting of obligations of the Borrower or replacing any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(dd) Indebtedness permitted under clauses of the Borrower or any Subsidiary to or on behalf of any joint venture (a), regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (i), including with respect to intercompany self-insurance arrangements) of the Borrower and the Subsidiaries;
(j), (m), (n), (q), (r), (u), (w), (y), (z), (bbee) and/or [Reserved];
(ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof[Reserved]; provided, that:and
(igg) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinancedall premium (if any, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discountsexpenses, other reasonable and customary defeasance costs, interest (including post-petition interest), fees, commissions expenses, charges and expenses additional or contingent interest on obligations described in clauses (including upfront fees, original issue discount a) through (ff) above or initial yield payments) incurred in connection refinancings thereof. For purposes of determining compliance with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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 secured6.01, the Lien securing such amount of any Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has incurred (Ain respect of term Indebtedness) a final maturity equal or committed (in respect of revolving Indebtedness) on or prior to or later than (the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Closing Date, does not require mandatory commitment reductionson the date on which such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided, that if any, prior to) the earlier of such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (x) the Latest Maturity Date and (y) the final maturity of or in a different currency from the Indebtedness being refinanced), refunded or replaced and (B) other than with respect such refinancing would cause the applicable Dollar-denominated restriction to revolving Indebtednessbe exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Refinancing Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness has does not exceed (xi) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original or committed principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders oramount, as applicable, of such Indebtedness being refinanced plus (ii) the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
aggregate amount of fees, underwriting discounts, premiums (iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (mincluding tender premiums), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness defeasance costs and other costs and expenses incurred in respect connection with such refinancing. Further, for purposes of Indebtedness permitted under clause (a) of determining compliance with this Section 6.01, (A) such Indebtedness, if secured, is secured only Indebtedness need not be permitted solely by Permitted Liens at the time reference to one category of such refinancing, refunding or replacement permitted Indebtedness described in Sections 6.01(a) through (it being understood that secured Indebtedness gg) but may be refinanced with unsecured Indebtedness), permitted in part under any combination thereof and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such in the event that an item of Indebtedness is incurred by (or any portion thereof) meets the obligor criteria of one or obligors in respect more of the categories of permitted Indebtedness being refinanceddescribed in Sections 6.01(a) through (gg), refunded the Borrower shall, in its sole discretion, classify or replacedreclassify, except to the extent otherwise permitted pursuant to or later divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 6.01 and will only be required to include the amount and type of such item of Indebtedness (it being understood that or any entity that was a guarantor portion thereof) in respect one of the relevant refinanced above clauses and such item of Indebtedness may shall be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded treated as having been incurred or replaced was expressly contractually subordinated existing pursuant to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement only one of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecuredclauses; provided, that any such Refinancing (i) all Indebtedness that is pari passu or junior under outstanding on the Closing Date under this Agreement shall at all times be deemed to have been incurred pursuant to clause (p)(i) of this Section 6.01. In addition, with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with was permitted to be incurred hereunder on the Initial Term Loans hereunder in right date of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) such incurrence, any voluntary prepayment Increased Amount of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) such Indebtedness incurred by the Borrower to finance any acquisition or similar Investment shall also be permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity date of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofincurrence.
Appears in 2 contracts
Sources: Asset Based Revolving Credit Agreement (Sun Country Airlines Holdings, Inc.), Asset Based Revolving Credit Agreement (Sun Country Airlines Holdings, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness (other than Indebtedness of Loan Parties to Subsidiaries that are not Loan Parties) and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrowers or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved]Indebtedness of Holdings, the Borrowers or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to Holdings, either Borrower or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or Borrowers to Holdings or any Subsidiary, of Holdings to the Borrowers or any Subsidiary, and of any Subsidiary to Holdings, the Borrowers or any other Subsidiary; provided, that (i) Indebtedness of any Subsidiary that is not a Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit K hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower Representative;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry practices, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in the ordinary course of business or other cash management services, in each case incurred in the ordinary course of business business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with Holdings or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by Holdings or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement; provided, that, (x) in the case of any such Indebtedness secured by Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than 3.50 to 1.00, (y) in the case of any such Indebtedness secured by Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than 4.50 to 1.00, and (z) in the case of any other such Indebtedness, the Net Total Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than 5.60 to 1.00; provided, that the aggregate principal amount of Indebtedness outstanding under this clause (h) that is incurred by a Subsidiary other than a Loan Party immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions shall not exceed the greater of $100,000,000 and 55% of Relevant EBITDA; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by Holdings or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed the greater of $50,000,000 and 30% of Relevant EBITDA and (y) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations and any other Indebtedness incurred by Holdings or any Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) other Indebtedness of Holdings or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $90,000,000 and 50% of Relevant EBITDA, and any Permitted Refinancing Indebtedness in respect thereof;
(l) Indebtedness of Holdings or any Subsidiaries in an aggregate outstanding principal amount not greater than 100% of the net cash proceeds received by Holdings or either Borrower from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the net cash proceeds from the issuance and sale by Holdings or a Parent Entity of its Qualified Equity Interests or a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, Holdings or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions;
(m) Guarantees (i) by Holdings, the Borrowers or any other Loan Party of any Indebtedness of Holdings, the Borrowers or any Subsidiary Loan Party permitted to be incurred under this Agreement, (ii) by Holdings, any Borrower or any other Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by Holdings, Intermediate Holdings or the Borrowers of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by either Borrower or any other Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of Holdings, either Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the Transactions, any acquisition permitted by this Agreement, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(o) Indebtedness in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds warehouse receipts or similar instruments issued to support any performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the foregoing itemsordinary course of business or consistent with past practice or industry practices;
(fp) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs[Reserved];
(i) guaranties Indebtedness secured by Other First Liens so long as immediately after giving effect to the Borrower and/or incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 3.25 to 1.00; provided, that any Indebtedness outstanding under this clause (q)(i) shall be subject to Section 2.21(b)(vii); provided further, that the aggregate principal amount of Indebtedness outstanding under this clause (q)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(q)(i), Section 6.01(r)(i) and
Section 6.01 (s)(i) that are incurred by Subsidiaries other than the Loan Parties, the greater of $100,000,000 and 55% of Relevant EBITDA, and (ii) any Permitted Refinancing Indebtedness in respect thereof; provided further that (x) the final maturity date of such Indebtedness is on or after the Latest Maturity Date and (y) the Weighted Average Life to Maturity of such Indebtedness is greater than or equal to the Weighted Average Life to Maturity of the obligations Class of suppliersTerm Loans with the longest Weighted Average Life to Maturity;
(i) Indebtedness secured by Junior Liens so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, distributorsthe Net Secured Leverage Ratio on a Pro Forma Basis is not greater than 4.25 to 1.00; provided, resellersthat the aggregate principal amount of Indebtedness outstanding under this clause (r)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, customerswhen taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(q)(i), licensees this Section 6.01(r)(i) and sublicensees in Section 6.01(s)(i) that are incurred by Subsidiaries other than the ordinary course Loan Parties, the greater of business$100,000,000 and 55% of Relevant EBITDA, and (ii) any Permitted Refinancing Indebtedness in respect thereof; provided further that (x) the final maturity date of such Indebtedness is on or after the Latest Maturity Date; (y) the Weighted Average Life to Maturity of such Indebtedness is greater than or equal to the Weighted Average Life to Maturity of the Class of Term Loans with the longest Weighted Average Life to Maturity; and (z), the terms of such Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the Latest Maturity Date (other than customary offers to repurchase or mandatory prepayment provisions upon a change of control, asset sale or event of loss and customary acceleration rights after an event of default);
(i) other Indebtedness so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net Total Leverage Ratio on a Pro Forma Basis is not greater than 5.60 to 1.00; provided, that the aggregate principal amount of Indebtedness outstanding under this clause (s)(i) at such time that is incurred by a Subsidiary other than a Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(q)(i), Section 6.01(r)(i) and this Section 6.01(s)(i) that are incurred by Subsidiaries other than the Loan Parties, the greater of $100,000,000 and 55% of Relevant EBITDA, and (ii) any Permitted Refinancing Indebtedness in respect thereof; provided, further that (x) the final maturity date of such Indebtedness is on or after the Latest Maturity Date; (y) the Weighted Average Life to Maturity of such Indebtedness is greater than or equal to the Weighted Average Life to Maturity of the Class of Term Loans with the longest Weighted Average Life to Maturity; and (z), the terms of such Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the Latest Maturity Date (other than customary offers to repurchase or mandatory prepayment provisions upon a change of control, asset sale or event of loss and customary acceleration rights after an event of default);
(t) Indebtedness of Subsidiaries that are not Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $50,000,000 and 30% of Relevant EBITDA, and any Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or Holdings or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services 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 or any Hedging Agreements;
(iiiv) Indebtedness representing deferred compensation to employees, consultants or independent contractors of Holdings (or, to the extent such work is done for Holdings or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(w) Indebtedness in connection with Permitted Securitization Financings;
(x) obligations in respect of letters Cash Management Agreements;
(y) Refinancing Notes and any Permitted Refinancing Indebtedness incurred in respect thereof;
(z) Indebtedness in an aggregate principal amount outstanding not to exceed at the time of creditincurrence the Incremental Amount available at such time, bankers’ acceptancesprovided that any such Indebtedness if in the form of term loans secured by liens ranking pari passu with liens securing the Term Loans shall be subject to the requirements of Section 2.21(b)(vii), bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities and any Permitted Refinancing Indebtedness in respect thereof;
(aa) Guarantees of Indebtedness under customer financing lines of credit entered into in the ordinary course of business;
(hbb) Indebtedness of, incurred on behalf of, or representing Guarantees by the Borrower and/or any Subsidiary of Indebtedness or of, joint ventures in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred outstanding pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive6.01(bb), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does would not exceed the greater of $20,000,000 50,000,000 and 2530% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodRelevant EBITDA, and any Permitted Refinancing Indebtedness in respect thereof;
(occ) Indebtedness consisting of promissory notes issued by the Borrower Holdings or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pdd) Indebtedness refinancing, refunding consisting of obligations of Holdings or replacing any Indebtedness permitted Subsidiary under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness deferred compensation or other similar arrangements incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the principal amount of by 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, penalties 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 person in connection with the relevant refinancing, refunding or replacement Transactions and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofBusiness Acquisiti
Appears in 2 contracts
Sources: Credit Agreement (Presidio, Inc.), Credit Agreement (Presidio, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $2,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return and of money bonds or other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of creditHoldings, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such any other Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became of any Subsidiary that is not a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) Loan Party owing to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral Parties shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 2 contracts
Sources: Incremental Assumption Agreement (PlayAGS, Inc.), Incremental Assumption Agreement (AP Gaming Holdco, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (Closing Date, including any Additional Term Loans without limitation, Indebtedness of Foreign Subsidiaries that may be incurred under committed and uncommitted working capital, letter of credit or bank guarantee lines outstanding and in effect on the Closing Date, and set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (or working capital, letter of credit or bank guarantee lines) (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with Holdings or any subsidiary);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]Indebtedness of Holdings and the Subsidiaries pursuant to Swap Agreements permitted by Section 6.13;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of the Borrower benefit of) any person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance to Holdings or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementperson, provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers' compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the any Borrower and/or to any Subsidiary and of any Subsidiary to any Borrower or any other Subsidiary, provided that (i) pursuant Indebtedness of any Subsidiary that is not a Domestic Subsidiary Loan Party 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 ordinary course of business Loan Parties shall be subject to Section 6.04(b) and (ii) in respect Indebtedness of letters any Borrower to any Subsidiary and Indebtedness of credit, bank guaranties, surety bonds, performance bonds or similar instruments any other Loan Party to support any of Subsidiary that is not a Domestic Subsidiary Loan Party (the foregoing items"Subordinated Intercompany Debt") shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, (ii) Indebtedness including those incurred in the ordinary course of business in respect of to secure health, safety and environmental obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(hg) Guarantees Indebtedness arising from the honoring by the Borrower and/or any Subsidiary of Indebtedness a bank or other obligations financial institution of a check, draft or similar instrument drawn against insufficient funds in the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, ordinary course of business or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into cash management services in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, provided that (ix) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case credit or purchase cards) is extinguished within three Business Days of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date its incurrence and (y) the final maturity of the such Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded credit or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which purchase cards is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii)extinguished within 60 days from its incurrence;
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Credit Agreement (Nalco Energy Services Equatorial Guinea LLC)
Indebtedness. The Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, to create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) Indebtedness of (i) the Borrower to Holdings and/or any Subsidiary and/or Restricted Subsidiary, (ii) of any Subsidiary Holdings to the Borrower and/or any Restricted Subsidiary and/or (iii) of any Restricted Subsidiary to Holdings, the Borrower and/or any other Restricted Subsidiary; provided, provided that in the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party owing to the BorrowerBorrower or any Restricted Subsidiary that is a Loan Party, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower any Loan Party to any Restricted Subsidiary that is not a Loan Party incurred in reliance on this clause (b) must be unsecured and expressly subordinated to the Obligations of the Borrower such Loan Party on terms that are reasonably acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reservedReserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with the Transactions, any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital StockStock or other Investments, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any such Restricted Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Restricted Subsidiary incurred in the ordinary course of business (i) as a result of or 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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Restricted Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including Banking Services Obligations and incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Restricted Subsidiary of the obligations of suppliers, distributors, resellers, customers, customers and licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into 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 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary)Agreement; provided, provided that in the case of any Guarantee by the Borrower any Loan Party of the obligations of any Subsidiary of the Borrower or of any joint venturenon-Loan Party, the related Investment is permitted under Section 6.06;
(i) Indebtedness of Holdings, the Borrower and/or any Restricted Subsidiary existing, or pursuant to commitments existing, existing on the Closing Date; provided, provided that any such Indebtedness or commitment having an outstanding principal amount in excess of $5,000,000 2,500,000 shall be described on Schedule 6.01;
(j) Surety Bond IndebtednessIndebtedness of Restricted Subsidiaries that are not Loan Parties; provided that the aggregate outstanding principal amount of such Indebtedness shall not exceed the greater of $30,000,000 and 30% of Consolidated Adjusted EBITDA for the most recently ended Test Period when aggregated with any Indebtedness of Restricted Subsidiaries that are not Loan Parties incurred under Section 6.01(q), (u) or (w);
(k) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense license or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 25,000,000 and 3525% of Consolidated Adjusted EBITDA as of the last day of for the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Restricted Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateInvestment; provided, that provided that:
(i) such Indebtedness (A) existed at the time such Person became a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and and
(ii) the aggregate outstanding principal amount of after giving effect to such Indebtedness does not exceed on a Pro Forma Basis:
(A) no Event of Default exists and is continuing; and
(B) the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA Borrower is in compliance with Section 6.15(a), calculated on a Pro Forma Basis as of the last day of the most recently ended Test Period;.
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Restricted Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), and (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, 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, penalties 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 and the related refinancing transaction, (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, provided that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bbn) (and other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time),
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (other than any Indebtedness of the type described in Section 6.01(m)) (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or any other provisions provisions, taken as a whole, applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants covenant or provisions provision which reflect then-constitutes a then current market terms term for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses clauses, (m), (n), (q) (solely as it relates to (1) the Fixed Shared Incremental Amount), Amount or (r), 2) the amount of such Indebtedness that may be incurred by Restricted Subsidiaries that are not Loan Parties incurred pursuant to (ux) clause (i) therein and (y) the proviso to clause (ii) therein), (w) (solely as it relates to (1) the Fixed Shared Incremental AmountAmount or (2) the amount of such Indebtedness that may be incurred by Restricted Subsidiaries that are not Loan Parties incurred pursuant to (x) clause (i) therein and (y) the proviso to clause (ii) therein), (y), and (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Shared Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts amount outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole whole, or (2) set forth in any applicable Acceptable Intercreditor Agreement, (B) such Indebtedness is incurred and guaranteed solely by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Refinancing Indebtedness constituting Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, provided that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person other than one or more Loan Parties and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien first lien basis with respect to the Collateral may participate in (x) in any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) in any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii2.11(b)(vi);
(q) so long as no Default or Event of Default shall exist immediately prior to or after giving effect to the incurrence or implementation of such Indebtedness, Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date Date; provided that such Indebtedness incurred pursuant to this clause (q) shall not exceed the greater of (i) the Shared Incremental Amount (giving effect to the adjustments thereto as described in an outstanding principal amount not to exceed in the aggregate clause (a) of the Fixed definition of “Incremental Amount plus Cap”), and (bii) an additional unlimited amount so long as as, in the case of this clause (ii), after giving effect thereto to such acquisition or similar Investment on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and any other concurrently incurred Indebtedness and, in the case of any revolving indebtednesscredit facility then being incurred or established, assuming a full utilization thereof)drawing of such revolving credit facility): (1) if such Acquisition Ratio Debt constitutes First Lien Debt, giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments the First Lien Leverage Ratio, calculated on a Pro Forma Basis, as of the last day of the then most recently ended Test Period, does not exceed 4.50:1.00, (2) if such IndebtednessAcquisition Ratio Debt constitutes Junior Lien Debt, “Incurred Acquisition Debt”):
the Secured Leverage Ratio, calculated on a Pro Forma Basis, as of the last day of the then most recently ended Test Period, does not exceed 5.50:1.00 or (i3) if such Indebtedness is secured by a Lien on any asset that does not constitute Collateral or is unsecured, the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured Total Leverage Ratio, calculated on a First Priority Lien basisPro Forma Basis, as of the First Lien Leverage Ratio last day of the then most recently ended Test Period, does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral 6.00:1.00; provided, however, that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage aggregate outstanding principal amount of Acquisition Ratio does Debt incurred in reliance on this Section 6.01(q) by Restricted Subsidiaries that are not Loan Parties shall not, at any time, exceed 3.90:1.00 an amount equal to the greater of $30,000,000 and 30% of Consolidated Adjusted EBITDA for the most recently ended Test Period when aggregated with any Indebtedness of Restricted Subsidiaries that are not Loan Parties incurred under Section 6.01(j), (u) or (w), (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (yI) the final maturity date with respect to of such Incurred Acquisition Debt Indebtedness (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofI
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than (x) intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary and (y) to the extent set forth on Schedule 6.01);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness in respect of self-insurance and Indebtedness and other obligations owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice;
(e) Indebtedness of the Borrower and/or to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided, that (i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit J hereto or on substantially identical subordination terms or other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in each case incurred in the ordinary course of business or other cash management services incurred in the ordinary course of business or consistent with past practice;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Acquisition) or any Investment or New Project permitted hereunder, where such acquisition, merger or consolidation, Investment or New Project is not prohibited by this Agreement; provided, that (x) the Net Total Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation, Investment or New Project, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than 4.00 to 1.00 and (y) in the case of any such Indebtedness incurred under this clause (h)(i) by a Subsidiary other than a Subsidiary Loan Party that is incurred in contemplation of such acquisition, merger or consolidation, Investment or New Project, the aggregate outstanding principal amount of such Indebtedness immediately after giving effect to such acquisition, merger or consolidation, Investment or New Project, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(h)(i)(y) and Section 6.01(s)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, shall not exceed the greater of $15,000,000 and 0.15 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (i) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, installation, repair, replacement or improvement of the respective property (real or personal), equipment or other asset (whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, installation, repair, replacement or improvement, in an aggregate principal amount outstanding that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(i), would not exceed the greater of $35,000,000 and 0.35 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (ii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) Capitalized Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 6.03 and (ii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $20,000,000 and 0.20 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(l) Indebtedness of the Borrower or any Subsidiary in an aggregate outstanding principal amount not greater than 100% of the amount of net cash proceeds received by the Borrower from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the Borrower or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions;
(m) Guarantees (i) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (ii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(l) or 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business or consistent with past practice on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01 to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(l) or Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the Transactions, any Permitted Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(o) Indebtedness in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds warehouse receipts or similar instruments issued to support any performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the foregoing itemsordinary course of business or consistent with past practice;
(fp) Indebtedness of Guarantees by the Borrower and/or or any Subsidiary of Indebtedness under customer financing lines of credit entered into in respect the ordinary course of Banking Services and/or otherwise in connection business or consistent with Cash management and Deposit Accounts, including incentive, supplier finance or similar programspast practice;
(q) [reserved];
(r) [reserved];
(i) guaranties unsecured Indebtedness so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net Total Leverage Ratio on a Pro Forma Basis is not greater than 4.00 to 1.00; provided, that the aggregate principal amount of Indebtedness outstanding under this clause (s)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the Borrower and/or aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(h)(i)(y) and this Section 6.01(s)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $15,000,000 and 0.15 times the obligations of suppliersEBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $15,000,000 and 0.15 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness incurred in the ordinary course of business or consistent with past practice in respect of obligations of the Borrower and/or or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness services; provided, that such obligations are incurred in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting connection with open accounts extended by suppliers on customary trade payables, warehouse receipts or similar facilities entered into terms in the ordinary course of businessbusiness or consistent with past practice and not in connection with the borrowing of money or any Hedging Agreements;
(hv) Guarantees by Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower and/or (or, to the extent such work is done for the Borrower or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business or consistent with past practice;
(w) Indebtedness in connection with Permitted Securitization Financings;
(x) obligations in respect of Cash Management Agreements;
(i) Refinancing Notes and (ii) any Permitted Refinancing Indebtedness incurred in respect thereof;
(z) [reserved];
(aa) [reserved];
(bb) (i) Indebtedness of, incurred on behalf of, or representing Guarantees of Indebtedness or of, joint ventures in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred outstanding pursuant to this Section 6.01 6.01(bb), would not exceed the greater of $75,000,000 and 0.75 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(cc) Indebtedness issued by the Borrower or such Subsidiaryany Subsidiary to current or former officers, as applicabledirectors and employees thereof, their respective estates, spouses or other obligations former spouses to finance the purchase or redemption of Equity Interests of the Borrower and/or any Subsidiary not prohibited permitted by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(idd) Indebtedness consisting of obligations of the Borrower or any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Acquisitions or any other Investment permitted hereunder;
(ee) Indebtedness of the Borrower and/or or any Subsidiary existing, to or pursuant to commitments existing, on the Closing Date; provided, that behalf of any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
joint venture (j) Surety Bond Indebtedness;
(k) Indebtedness regardless of the Borrower and/or any form of legal entity) that is not a Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into arising in the ordinary course of businessbusiness or consistent with past practice in connection with the cash management operations (including with respect to intercompany self-insurance arrangements) of the Borrower and its Subsidiaries;
(lff) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection consistent with customer financing arrangements in the ordinary course of businesspast practice;
(mgg) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the Borrower and/or stated amount of such Letter of Credit (or a letter of credit issued under any Subsidiary with respect to Capital Leases and purchase money other revolving credit or letter of credit facility permitted by Section 6.01);
(i) Indebtedness under bilateral, working capital or local facilities in an aggregate outstanding principal amount not outstanding that, immediately after giving effect to exceed the greater incurrence of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at and the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation use of proceeds thereof, and (ii) together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(hh)(i), would not exceed the greater of $20,000,000 50,000,000 and 25% of Consolidated Adjusted 0.50 times the EBITDA as of calculated on a Pro Forma Basis for the last day of the then most recently ended Test Period;
, and (oii) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; provided, that:;
(iii) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinancedall premium (if any, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discountsexpenses, other reasonable and customary defeasance costs, interest (including post-petition interest), fees, commissions expenses, charges and expenses additional or contingent interest on obligations described in clauses (including upfront fees, original issue discount a) through (hh) above or initial yield payments) incurred in connection refinancings thereof. For purposes of determining compliance with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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 securedSection 6.02, the Lien securing such amount of any Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has incurred (Ain respect of term Indebtedness) a final maturity equal or committed (in respect of revolving Indebtedness) on or prior to or later than (the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Closing Date, does not require mandatory commitment reductionson the date on which such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided, that if any, prior to) the earlier of such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (x) the Latest Maturity Date and (y) the final maturity of or in a different currency from the Indebtedness being refinanced), refunded or replaced and (B) other than with respect such refinancing would cause the applicable Dollar-denominated restriction to revolving Indebtednessbe exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Refinancing Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness has does not exceed (xi) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original or committed principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders oramount, as applicable, of such Indebtedness being refinanced plus (ii) the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
aggregate amount of fees, underwriting discounts, premiums (iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (mincluding tender premiums), (n)accrued interest, (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness defeasance costs and other costs and expenses incurred in respect connection with such refinancing. Further, for purposes of Indebtedness permitted under clause (a) of determining compliance with this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall need not be Guaranteed permitted solely by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofre
Appears in 1 contract
Sources: Credit Agreement (Cerence Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume assume, guarantee, suffer to exist or otherwise become or remain liable with respect to any Indebtedness, except:except (Indebtedness described below is herein referred to as “Permitted Indebtedness”):
(a) obligations (contingent or otherwise) of the Secured Obligations Borrower or any of the Subsidiaries existing or arising under any Swap Contract, provided that (including i) 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 fluctuations in interest rates or foreign exchange rates or otherwise to mitigate risks associated with its assets or liabilities or business operations, and (ii) such Swap Contract does not contain any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loansprovision exonerating the counterparty to such Swap Contract from its obligation to make payments on outstanding transactions to the Borrower or the Subsidiaries (notwithstanding that the Borrower or a Subsidiary is the defaulting party);
(bi) Indebtedness of a Subsidiary of the Borrower owed to the Borrower or to another Subsidiary of the Borrower and (ii) Indebtedness of the Borrower owed to any Subsidiary and/or Subsidiaries of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such in each case, which Indebtedness shall (A) constitute “Pledged Debt”, (B) be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are (including subordination terms, if owed by a Loan Party) acceptable to the Administrative Agent and (acting at C) be otherwise permitted under the direction provisions of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Section 7.03;
(c) Indebtedness under the Loan Documents;
(d) Indebtedness of the Loan Parties under the DIP Term Facility and any refinancing in respect thereof (including Guarantees of any Guarantor in respect of such Indebtedness) not to exceed $115 million, plus the amount of any paid-in-kind interest and prepayment premiums thereon, and other reasonable amounts paid, and fees (including original issue discount and upfront fees) and expenses reasonably incurred, in connection with such refinancing;
(e) Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and any refinancing in respect thereof;
(f) Guarantees of the Borrower or any Guarantor in respect of Indebtedness otherwise permitted hereunder of the Borrower or any Subsidiary Guarantor;
(g) Indebtedness in respect of Capital Lease Obligations, Synthetic Lease Obligations, and Purchase Money Obligations for fixed or capital assets within the limitations set forth in Section 7.01(i) in respect thereof; provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $1.0 million;
(h) the Prepetition Term Loans and any refinancing in respect thereof (including Guarantees of any Guarantor in respect of such Indebtedness) not to exceed $200.0 million;
(i) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness[reserved];
(k) Indebtedness of the Borrower and/or Loan Parties in an aggregate principal amount not to exceed $1.0 at any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;time outstanding; and
(l) Indebtedness of Foreign Subsidiaries under the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness Swedish Credit Facility in an aggregate outstanding principal amount not to exceed the greater U.S. dollar equivalent (as reasonably determined by the Administrative Agent) of $52,850,000 and 35% 15.0 outstanding at any time. For purposes of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection determining compliance with any acquisition or similar Investment permitted hereunder after U.S. dollar-denominated restriction on the Closing Date; providedincurrence of Indebtedness, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding U.S. dollar-equivalent principal amount of Indebtedness denominated in a non-U.S. currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness does not exceed the greater of $20,000,000 was incurred; provided that, if such Indebtedness is incurred to extend, replace, refund, refinance, renew or defease other Indebtedness denominated in a foreign currency, and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorsuch extension, officerreplacement, employeerefunding, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding renewal or replacing any Indebtedness permitted under clauses (a)defeasance would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such extension, (i)replacement, (j)refunding, (m)refinancing, (n)renewal or defeasance, (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) such U.S. 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 the such Indebtedness being extended, replaced, refunded, refinanced, refunded renewed or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofdefeased.
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Indebtedness. The Borrower shall notCreate, nor shall it permit any of its Subsidiaries to, directly or indirectly, createissue, incur, assume assume, become liable in respect of or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) Indebtedness of the Secured Obligations (Borrower or any Subsidiary Guarantor pursuant to any Loan Document, not including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)amounts incurred pursuant to Section 2.4;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; providedassociated with worker’s compensation claims, that in the case of any Indebtedness of any Subsidiary owing to the Borrowerself-insurance obligations, such Indebtedness shall be permitted as an Investment under Section 6.06; providedbankers’ acceptances, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety performance bonds, performance completion bonds, bid bonds, appeal bonds and surety bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, and any guarantees or letters of credit functioning as or supporting any of the foregoing;
(iic) intercompany Indebtedness incurred in the ordinary course of business in respect of obligations of by the Borrower and/or or any Subsidiary to pay the deferred purchase price of goods or services or progress payments Guarantor in connection with a loan made by any Loan Party to the Borrower or such goods and services and Subsidiary Guarantor, evidenced by the Subordinated Intercompany Note; provided that such Indebtedness is not held, assigned, transferred, negotiated or pledged to any Person other than the Secured Parties pursuant to the Subordinated Intercompany Note;
(iiid) Indebtedness in respect endorsements of letters of credit, bankers’ acceptances, bank guaranties or similar negotiable instruments supporting trade payables, warehouse receipts or similar facilities entered into for collection in the ordinary course of business;
(he) Guarantees by Guarantee Obligations incurred in the Borrower and/or any Subsidiary ordinary course of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 business by the Borrower or such Subsidiary, as applicable, or other any of its Subsidiaries of obligations of the Borrower and/or or any Subsidiary not prohibited by this Agreement Guarantor;
(f) Indebtedness outstanding on the date hereof and not prohibited listed on Schedule 8.2(f) and any refinancings, refundings, renewals or extensions thereof with Permitted Refinancing Indebtedness;
(g) Indebtedness and obligations in respect of Hedge Agreements permitted under Section 8.10;
(h) obligations in respect of letters of credit required to be incurred by issued (i) for the benefit of C9 Wireless, LLC (or its successors and assigns) in accordance with the Royal Street Agreements or (ii) up to an aggregate amount of $25,000,000, for the benefit of any Person that controls a Person in which the Borrower or such Subsidiary); provided, that in the case of any Guarantee Subsidiary makes an Investment permitted by the Borrower clause (x) or (xiv) of the obligations definition of any Subsidiary of Permitted Investments (provided such Person in which such Investment was made shall have granted to the Borrower or the Subsidiary making such Investment a sole first priority Lien on substantially all of its assets (except (x) as may be limited by a Requirement of Law or (y) for Other Approved Liens)) to secure any joint venture, put right for the related Investment is permitted under Section 6.06benefit of the Person controlling such Person;
(i) Indebtedness of the Borrower and/or any in respect of the Senior Notes in an aggregate principal amount not to exceed $1,000,000,000 and (ii) Guarantee Obligations of the Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any Guarantors in respect of such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01Indebtedness;
(j) Surety Bond IndebtednessIndebtedness for relocation or clearing obligations relating to the Borrower’s or any Subsidiary Guarantor’s FCC licenses in an aggregate principal amount (or accreted value, as applicable) at any time outstanding not to exceed $50,000,000;
(k) Indebtedness secured by Liens permitted by clauses (i) and (j) of the Borrower and/or any Subsidiary consisting definition of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businessExcepted Liens;
(l) the guarantee by the Borrower or any of its Subsidiaries of Indebtedness of the Borrower and/or any or a Subsidiary consisting of (i) the financing Borrower that was permitted by another provision of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessthis Section 8.2;
(m) Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing (whether prior to or within 270 days after) all or any part of the purchase price or cost of design, construction, installation or improvement of property, plant or equipment or the Capital Stock of any Person owning such assets used in the business of the Borrower and/or or any of Subsidiary with respect to Capital Leases and purchase money Indebtedness Guarantor, in an aggregate outstanding principal amount amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (m), not to exceed the greater of (a) $52,850,000 150,000,000 and 35(b) 3.0% of the Consolidated Adjusted EBITDA as Total Assets of the last day of Borrower and its Consolidated Subsidiaries on the most recently ended Test Perioddate such Indebtedness in incurred, at any time outstanding;
(n) additional secured Indebtedness of any Person (it being understood that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) once such Indebtedness (Ais properly incurred pursuant to this clause it shall at all times thereafter be permitted to exist pursuant to this clause) existed of the Borrower or any Subsidiary Guarantor, so long as at the time of incurrence (assuming all Revolving Commitments are fully funded) the Consolidated Senior Secured Leverage Ratio for the Borrower’s most recently ended four Fiscal Quarters for which internal financial statements are available immediately preceding the date on which such Person became additional secured Indebtedness is incurred would be in accordance with, and as set forth in, the applicable Compliance Certificate, has been no greater than the ratio set forth in Section 8.18(a) for such period as if such covenant were at the time of incurrence in effect, determined on a Subsidiary or pro forma basis (including a pro forma application of the assets subject to net proceeds therefrom), as if such additional secured Indebtedness had been incurred at the beginning of such four-Fiscal Quarter period; provided that if such Indebtedness were acquired and is secured by Liens that are pari passu with those in favor of the Secured Parties, such Indebtedness must be incurred pursuant to Section 2.4 hereof; provided further, that if such Indebtedness is secured by Liens that are junior to those in favor of the Secured Parties, such Indebtedness shall (B1) was have a greater Weighted Average Life to Maturity than the Tranche B Term Loans, (2) not created or incurred in anticipation thereofmature prior to the Term Loan Maturity Date, (3) have covenants less restrictive than those set forth herein (taken as a whole), and (ii4) be subject to an intercreditor agreement to be entered into by the aggregate outstanding principal amount Administrative Agent and the agent or other representative for the holders of such Indebtedness does not exceed Indebtedness, reasonably satisfactory in form and substance to the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodAdministrative Agent;
(o) additional unsecured Indebtedness consisting (it being understood that once such Indebtedness is properly incurred pursuant to this clause it shall at all times thereafter be permitted to exist pursuant to this clause) of promissory notes issued by the Borrower or any Subsidiary to any stockholder Guarantor so long as at the time of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Companyincurrence (assuming all Revolving Commitments are fully funded), the Borrower or any Subsidiary Consolidated Total Leverage Ratio for the Borrower’s most recently ended four Fiscal Quarters for which internal financial statements are available immediately preceding the date on which such additional unsecured Indebtedness is incurred would be in accordance with, and as set forth in, the applicable Compliance Certificate, has been no greater than the ratio set forth in Section 8.18(b) for such period as if such covenant were at the time of incurrence in effect determined on a pro forma basis (or their respective Immediate Family Members) to finance including a pro forma application of the purchase or redemption net proceeds therefrom), as if such additional unsecured Indebtedness had been incurred at the beginning of Capital Stock of any Parent Company permitted by Section 6.04(a);such four-Fiscal Quarter period; and
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; providedexchange for, that:
or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (iother than intercompany Indebtedness) 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, penalties 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 and the related refinancing transaction, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts that was 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 definition (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) other than in the case of Refinancing Indebtedness with respect to under clauses (i), (j), (mk), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereofo) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amountp) of this Section 6.018.2. For purposes of determining compliance with this Section 8.2, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories described in the clauses above, or is otherwise entitled to be incurred pursuant to this Section, the incurrence thereof shall Borrower will be without duplication permitted to classify such item of any amounts outstanding in reliance Indebtedness on the relevant clause date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section; provided, in each such case, that the amount available under thereof is included in Consolidated Interest Expense as accrued. Notwithstanding any other provision of this Section, the relevant clause shall be reduced by the maximum amount of Indebtedness that the applicable Refinancing Indebtedness,
(v) except in the case Borrower or any of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness its Subsidiaries may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted incur pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values. The amount of any Person and Indebtedness outstanding as of any date will be: (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (ai) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as accreted value of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred andIndebtedness, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction Indebtedness issued with original issue discount; (ii) in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such respect of Indebtedness is of another Person secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on assets of a First Priority Lien basisGroup Member, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
lesser of (A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
Fair Market Value of such assets at the date of determination and (B) if such Incurred Acquisition Debt consists the amount of Indebtedness for borrowed money or the Indebtedness of the kind described in clause other Person; and (ciii) the principal amount of the definition thereof:
(C) (x) Indebtedness, in the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity case of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofIndebtedness.
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Indebtedness. The Borrower shall Company will not, nor shall will it permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume incur or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Obligations;
(bi) Indebtedness incurred under the Term Loan Documents in an aggregate principal amount not to exceed $2,500,000,000 (plus Indebtedness incurred after the Closing Date pursuant to Section 2.17 and Section 2.19 of the Term Loan Credit Agreement, as such provisions of the Term Loan Credit Agreement are in effect on the Term Loan Closing Date) and any Term Loan Refinancing Indebtedness in respect thereof (as permitted under the Intercreditor Agreement); provided that, in each case, such Indebtedness and the related Liens (if any) shall be subject to the Intercreditor Agreement; and (ii) other Indebtedness existing on the Closing Date and set forth on Schedule 6.01 and Permitted Refinancing Indebtedness in respect thereof;
(c) Indebtedness of the Borrower Company owing to any Subsidiary and/or Restricted Subsidiary, and of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Restricted Subsidiary owing to the BorrowerCompany or any other Restricted Subsidiary, to the extent constituting an Investment permitted by Section 6.04(c) or set forth on Schedule 6.04; provided that (i) all such Indebtedness owed to a Loan Party shall be permitted as an Investment under Section 6.06; provided, further, evidenced by a promissory note that any is pledged to the Collateral Agent in accordance with the terms of the Collateral Agreement and (ii) all such Indebtedness of the Borrower any Loan Party owed to any Restricted Subsidiary must that is not a Loan Party shall be unsecured and expressly subordinated to the Obligations of pursuant to the Borrower on terms that are Subordinated Intercompany Note or other subordination or similar agreement reasonably acceptable to the Administrative Agent (acting at the direction it being understood that payments or prepayments of the Required Lenderssuch Indebtedness shall be permitted if, acting reasonably) (including pursuant immediately prior to or after giving effect to any such payments or prepayments, an Intercompany NoteEvent of Default has not occurred);
(c) [reserved];
(d) Guarantees by the Company of Indebtedness arising from of any agreement providing for indemnification, adjustment Restricted Subsidiary and by any Restricted Subsidiary of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to Indebtedness of the Closing Date Company or any other purchase of assets or Capital StockRestricted Subsidiary, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary provided that (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise so Guaranteed is permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower Borrowers or such Subsidiary); provided, that in the case of any Guarantee Restricted Subsidiary by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (Aii) such Indebtedness, if secured, Guarantees by any Loan Party of Indebtedness of any Restricted Subsidiary that is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may not a Loan Party shall be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except permitted solely to the extent otherwise permitted pursuant to this by Section 6.01 6.04(c) and (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (Ciii) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is Guarantees permitted under Section 6.04(bthis clause (d) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect subordinated to the Secured Obligations hereunder that are secured of the Company or the applicable Restricted Subsidiary if, and on a First Priority Lien basis with respect the same terms as, the Indebtedness so Guaranteed is subordinated to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii)Secured Obligations;
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Term Loan Credit Agreement
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness of the Secured Obligations Company or any Subsidiary existing on the Closing Date (including provided that any Additional Term Loans such Indebtedness in excess of $10,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Company or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower other Loan Documents and any Permitted Refinancing Indebtedness incurred to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, Refinance such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Indebtedness;
(c) [reserved]Indebtedness of the Company or any Subsidiary pursuant to Swap Agreements permitted by Section 6.10;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower Company or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or Company to any Subsidiary and of any Subsidiary to the Company or any Subsidiary; provided that (i) pursuant Indebtedness of any Subsidiary that is not the Borrower owing to tendersthe Loan Parties shall be subject to Section 6.04(a) and (ii) Indebtedness of the Borrower to any other Subsidiary and Indebtedness of the Company or the Borrower to any Subsidiary that is not the Borrower shall be made expressly subject to a note containing subordination provisions reasonably satisfactory to the Company and the Administrative Agent;
(i) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds ordinary course Guarantees and any related credit support or similar instruments to support any of suretyship arrangements so long as the foregoing itemssame do not constitute Indebtedness for borrowed money or a Guarantee thereof;
(fg) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programs;
(i) guaranties by instrument drawn against insufficient funds in the Borrower and/or any Subsidiary ordinary course of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees business or other cash management services in the ordinary course of business; provided that (i) such Indebtedness (other than credit or purchase cards) is extinguished within ten Business Days of notification to the obligor by such bank or other financial institution of its incurrence and (ii) such Indebtedness in respect of credit or purchase cards is extinguished within 60 days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged into or consolidated with the Company or any Subsidiary after the Closing Date and Indebtedness assumed or incurred in connection with such acquisition, merger or consolidation and where such acquisition, merger or consolidation is permitted by this Agreement provided that the aggregate amount of such Indebtedness (together with the aggregate amount of Indebtedness outstanding pursuant to this paragraph (h) and paragraph (i) of this Section 6.01 and the Remaining Present Value of outstanding leases permitted under Section 6.03 would not exceed (x) the greater of $[*] and [*]% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition, merger or consolidation, such assumption or such incurrence, as applicable for which financial statements have been delivered pursuant to Section 5.04 plus (y) an amount of Indebtedness for which, after giving effect to such issuance, incurrence or assumption, the Company would be in Ratio Compliance; provided, further (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, (B) immediately after giving effect to such acquisition, merger or consolidation, the assumption and incurrence of any Indebtedness and any related transactions, the Company shall be in Pro Forma Compliance and (C) to the extent such Indebtedness is incurred in contemplation of such acquisition, merger or consolidation, it shall constitute Permitted Additional Debt; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness.
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Company or any Subsidiary prior to or within [*] days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, of such Indebtedness (together with the aggregate principal amount of Indebtedness outstanding pursuant to this paragraph (i) and paragraph (h) of this Section 6.01 and the Remaining Present Value of outstanding leases permitted under Section 6.03 would not exceed (x) the greater of $[*] and [*]% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04 plus (y) any additional amounts, so long as after giving effect to the issuance or incurrence of such Indebtedness the Company is in Ratio Compliance;
(j) Capital Lease Obligations incurred by the Company or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) other Indebtedness of the Company or any Subsidiary, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $[*] and [*]% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(l) Indebtedness of the Company pursuant to (i) the Senior Unsecured Notes Documents in an aggregate principal amount not in excess of $[*], and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(m) Guarantees (i) by the Borrower of the Indebtedness of the Company described in paragraph (l) of this Section 6.01, (ii) by the Borrower or the Company of any Indebtedness incurred in the ordinary course of business in respect of obligations of the Company permitted to be incurred under this Agreement, (iii) by the Borrower and/or or the Company of Indebtedness otherwise permitted hereunder of any Subsidiary that is not the Borrower to pay the deferred extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iv) by any Subsidiary that is not the Borrower of any Indebtedness of any other Subsidiary or any Loan Party permitted to be incurred under this Agreement; provided that Guarantees by any Loan Party or Subsidiary under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Obligations to the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Company or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations, in each case, incurred or progress payments assumed in connection with any Permitted Business Acquisition or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such goods and services and business, assets or a Subsidiary for the purpose of financing such acquisition;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations (other than obligations in respect of other Indebtedness) in the ordinary course of business;
(hp) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06[reserved];
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or business;
(iiir) Indebtedness consisting of Permitted Ratio Debt and Permitted Refinancing Indebtedness in respect thereof so long as (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (ii) (A) immediately after giving effect to the issuance, incurrence or assumption of such Indebtedness, the Loan-to-Value Ratio on a Pro Forma Basis is equal to or less than [*] to 1.0, or (B) immediately after giving effect to the issuance, incurrence or assumption of such Indebtedness, the Fixed Charge Coverage Ratio on a Pro Forma Basis at least [*] to 1.0;
(s) Indebtedness of Subsidiaries that are not the Borrower in an aggregate amount not to exceed the greater of $[*] and [*]% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(t) unsecured Indebtedness in respect of obligations of the Company or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements such goods and services; provided that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligations) in the ordinary course of business and not in connection with the borrowing of money or any Swap Agreements;
(u) Indebtedness representing deferred compensation to employees of the Company or any Subsidiary incurred in the ordinary course of business;
(mv) [reserved];
(w) Indebtedness of the Borrower and/or any New Vessel Subsidiary with respect to Capital Leases and purchase money Indebtedness under a New Vessel Financing (in an initial aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35[*]% of Consolidated Adjusted EBITDA the purchase price (as adjusted from time to time to give effect to any change orders or other modifications) of the last day purchased Vessel and [*]% of any related export credit insurance premium) and Guarantees thereof by the most recently ended Test PeriodCompany;
(nx) Indebtedness of any Person that becomes a Subsidiary the Company and the Subsidiaries incurred under lines of credit or overdraft facilities (including, but not limited to, intraday, ACH and purchasing card/T&E services) extended by one or more financial institutions reasonably acceptable to the Administrative Agent or one or more of the Lenders and (in each case) established for the Company’s and the Subsidiaries’ ordinary course of operations (such Indebtedness, the “Overdraft Line”), which Indebtedness assumed may be secured as, but only to the extent, provided in connection with any acquisition or similar Investment permitted hereunder after Section 6.02(a) and in the Closing Date; providedSecurity Documents (it being understood, however, that (i) such Indebtedness (A) existed at for a period of 30 consecutive days during each fiscal year of the time such Person became a Subsidiary or Company the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does under the Overdraft Line shall not exceed the greater of $20,000,000 [*] and 25[*]% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(aTotal Assets);
(py) intercompany Indebtedness refinancing, refunding or replacing in connection with any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), Permitted Vessel Transfer;
(z), ) [reserved];
(aa) [reserved];
(bb) and/or Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures not in excess of the greater of $[*] and [*]% of Consolidated Total Assets as of the fiscal quarter immediately prior to the date of such Investment for which financial statements have been delivered pursuant to Section 5.04;
(ffcc) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in paragraphs (a) through (bb) above. For purposes of determining compliance with this Section 6.01 6.01, (x) the amount of any Indebtedness denominated in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has incurred (Ain respect of term Indebtedness) a final maturity equal or committed (in respect of revolving Indebtedness) on or prior to or later than (the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Closing Date, on the date that such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (or in a different currency from the Indebtedness being refinanced), and such refinancing 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 refinancing, such Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not require mandatory commitment reductions, if any, prior toexceed (i) the earlier outstanding or committed principal amount, as applicable, of such Indebtedness being refinanced plus (xii) the Latest Maturity Date aggregate amount of fees, underwriting discounts, premiums (including tender premiums), defeasance costs and other costs and expenses incurred in connection with such refinancing and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) Indebtedness need not be permitted solely by reference to one category of permitted Indebtedness (or any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such dateportion thereof) described in Sections 6.01(a) through (cc) but may be permitted in part under any combination thereof, (B) in the event that an item of Indebtedness (or any covenants portion thereof) meets the criteria of one or provisions which reflect then-current market terms for more of the applicable categories of permitted Indebtedness (or any portion thereof) described in Sections 6.01(a) through (cc), the Company may, in its sole discretion, divide, classify or reclassify, or later divide, classify or reclassify (as if incurred at such later time), such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 6.01 and at the time of incurrence, division, classification or reclassification will be entitled to only include the amount and type of such item of Indebtedness or (C) any covenant or other provision which is conformed (or addedany portion thereof) to the Loan Documents for the benefit in one of the Lenders or, above clauses (or any portion thereof) and such item of Indebtedness (or any portion thereof) shall be treated as applicable, the Administrative Agent having been incurred or existing pursuant to an amendment to only such clause or clauses (or any portion thereof); provided, that all Indebtedness under this Agreement effectuated in reliance that is outstanding on Section 9.02(d)(ii)),
the Closing Date shall at all times be deemed to have been incurred pursuant to clause (iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amountb) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding 6.01 and (C) in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced connection with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the incurrence of revolving Indebtedness being refinanced, refunded or replaced, taken as a whole under this Section 6.01 or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except commitment relating to the extent otherwise permitted pursuant to incurrence of Indebtedness under this Section 6.01 (it being understood that and the granting of any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Lien to secure such Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness Company or applicable Subsidiary may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of designate the incurrence of such Indebtedness and the granting of such Lien therefor as having occurred on the date of first incurrence of such revolving loan Indebtedness or commitment (such date, the “Deemed Date”), and from and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) Deemed Date such Indebtedness is pari passu or junior in right shall be deemed to be outstanding for purposes of payment this Section 6.01 and secured by 6.02 so long as the Collateral on a pari passu or junior basis commitments with respect to such Indebtedness remain in effect and any related subsequent actual incurrence and the remaining Obligations hereunder, granting of such Lien therefor will be deemed for purposes of this Section 6.01 and Section 6.02 of this Agreement to have been incurred or is unsecured; provided, that granted on such Deemed Date. With respect to any such Refinancing Indebtedness that is pari passu or junior with respect was permitted to be incurred hereunder on the Collateral date of such incurrence, any Increased Amount of such Indebtedness shall also be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity date of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofincurrence.
Appears in 1 contract
Sources: Incremental Assumption Agreement (Norwegian Cruise Line Holdings Ltd.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01 to the Original Credit Agreement) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary (i) and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to tendersthis Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit J to the Original Credit Agreement or on substantially identical subordination terms or other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and industry practices;
(iiig) Indebtedness in respect arising from the honoring by a bank or other financial institution of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Successor Agent Appointment and Agency Transfer Agreement (Rackspace Technology, Inc.)
Indebtedness. The Borrower shall notCreate, nor shall it permit any of its Subsidiaries to, directly or indirectly, createissue, incur, assume assume, become liable in respect of or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) the Secured Obligations (including Indebtedness of any Additional Term Loans and Loan Party arising pursuant to any Additional Opco Revolving Facility Repayment Term Loans)Loan Document;
(b) Indebtedness of the Borrower (i) any Loan Party owing to any Subsidiary and/or of other Loan Party, and (ii) any Subsidiary (which is not a Guarantor) to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved]Guarantee Obligations incurred (i) by the Borrower and its Subsidiaries of obligations of any Loan Party permitted hereunder and (ii) by the Loan Parties of obligations of Subsidiaries that do not constitute Indebtedness;
(d) Indebtedness arising from outstanding on the date hereof and listed on Schedule 7.2(d) and any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred Permitted Refinancing Indebtedness in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementrespect thereof;
(e) Indebtedness of the Borrower and/or any Subsidiary (iincluding, without limitation, Capital Lease Obligations) 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 ordinary course of business and (iisecured by Liens permitted by Section 7.3(g) in an aggregate principal amount not to exceed $2,500,000 at any one time outstanding and any Permitted Refinancing Indebtedness in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsthereof;
(f) Surety Indebtedness of the Borrower and/or and any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) other Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties banker’s acceptances or similar instruments supporting trade payablesarrangements, warehouse receipts or similar facilities entered into in provided that the ordinary course aggregate amount of businessany such Indebtedness outstanding at any time shall not exceed $2,500,000;
(g) reserved;
(h) Guarantees by unsecured Indebtedness of the Borrower and/or any Subsidiary and its Subsidiaries, and secured Indebtedness of Indebtedness or other obligations Foreign Subsidiaries of the Borrower, in an aggregate principal amount, for all such Indebtedness taken together, not to exceed at any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06one time outstanding $5,000,000;
(i) Indebtedness obligations (contingent or otherwise) of the Borrower and/or or any Subsidiary existingof its Subsidiaries existing or arising under any Specified Swap Agreement, provided that such obligations are (or pursuant to commitments existing, on the Closing Date; provided, that any were) entered into by such Indebtedness Person in excess accordance with Section 6.12 and not for purposes of $5,000,000 shall be described on Schedule 6.01speculation;
(j) Surety Bond Indebtedness;reserved; and
(k) Indebtedness of a Person (excluding, for the avoidance of doubt, any such Person merged with or into the Borrower and/or any or a Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense prior to the date hereof) existing at the time such Person is merged with or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the a Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; providedbecomes a Subsidiary, provided that (i) such Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such merger or acquisition, (ii) such merger or acquisition constitutes a Permitted Acquisition, and (iii) with respect to any such Person who becomes a Subsidiary, (A) existed at such Subsidiary is the time only obligor in respect of such Person became a Subsidiary or the assets subject to such Indebtedness were acquired Indebtedness, and (B) was not created or incurred to the extent such Indebtedness is permitted to be secured hereunder, only the assets of such Subsidiary secure such Indebtedness. For purposes of determining compliance with the Dollar-denominated restrictions in anticipation thereofany subsection of this Section 7.2 on the incurrence of Indebtedness, and (ii) the aggregate outstanding 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 on which such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness was incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i)term Indebtedness, (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (andfirst committed, in the case of revolving credit Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such ; provided that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by Permitted Refinancing Indebtedness incurred to modify, refinance, refund, renew or extend other Indebtedness denominated in a Lien foreign currency, and such modification, refinancing, refunding, renewal or extension would cause the applicable Dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basisdate of such modification, the First Lien Leverage Ratio does refinancing, refunding, renewal or extension, such Dollar-denominated restriction shall be deemed not exceed 3.40:1.00;
(ii) if to have been exceeded so long as such Permitted Refinancing Indebtedness is secured otherwise permitted by a Lien on the Collateral that is junior terms of this Section 7.2. Notwithstanding the foregoing or any provision to the Lien contrary in any Loan Document, no Indebtedness incurred at any time in reliance on this Section 7.2 shall cause the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if Foreign Investment Limit in effect at such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply time to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofexceeded.
Appears in 1 contract
Sources: Credit Agreement (ShoreTel Inc)
Indebtedness. The Borrower shall notCreate, nor shall it permit any of its Subsidiaries to, directly or indirectly, createissue, incur, assume assume, become liable in respect of or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) the Secured Obligations (including Indebtedness of any Additional Term Loans and Loan Party pursuant to any Additional Opco Revolving Facility Repayment Term Loans)Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness MVWC or of the Borrower to any Subsidiary must be unsecured and expressly subordinated of any Wholly Owned Subsidiary Guarantor to MVWC or to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)or any other Subsidiary;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 Guarantee Obligations incurred in the ordinary course of business by MVWC or the Borrower or any of their respective Subsidiaries of obligations of any Wholly Owned Subsidiary Guarantor;
(d) Indebtedness outstanding on the Effective Date and listed on Schedule 7.3(d) and any refinancings, refundings, renewals or extensions thereof (iiwithout increasing, or shortening the maturity of, the principal amount thereof);
(e) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 7.4(g) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments an aggregate principal amount not to support exceed $12,000,000 at any of the foregoing itemsone time outstanding;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise of, represented by, or in connection with Cash management and Deposit Accountsappeal, including incentivebid, supplier finance performance, surety, customs or similar programs;
bonds issued for the account of any Group Member, the performance of bids, tenders, sales or contracts (i) guaranties by in each case, other than for the Borrower and/or any Subsidiary repayment of borrowed money), statutory obligations, workers’ compensation claims, unemployment insurance, other types of social security or pension benefits, self-insurance and similar obligations and arrangements, in each case, to the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness extent incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(g) Indebtedness incurred under, and Guarantee Obligations relating to, the Receivables Warehouse Facility;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case Non-Recourse Debt of any Guarantee by the Borrower of the obligations Time Share SPV in respect of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Qualified Securitization Transactions;
(i) Indebtedness of Foreign Subsidiaries and Indebtedness of Foreign Subsidiaries that is guaranteed by a Loan Party to the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01extent permitted by Section 7.3(j);
(j) Surety Bond Indebtednessunsecured Guarantee Obligations of a Loan Party or any Subsidiary in respect of Indebtedness of a Foreign Subsidiary to the extent permitted by Section 7.9(f);
(k) Indebtedness of a newly-acquired Subsidiary that is outstanding on the Borrower and/or date such Subsidiary is acquired; provided that any Subsidiary consisting such Indebtedness was not created in contemplation of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into such acquisition and such acquisition was made in the ordinary course of businesscompliance with Section 7.9;
(l) Indebtedness Guarantee Obligations in respect of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessSingapore L/C;
(m) Guarantee Obligations under the Separation and Distribution Agreement or the Intercompany Agreements;
(n) Guarantee Obligations constituting Standard Securitization Undertakings in respect of a Qualified Securitization Transaction;
(o) Indebtedness in respect of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Preferred Stock;
(p) Indebtedness in an aggregate outstanding respect of the deferred purchase price of Marriott Rewards points under the Marriott Rewards Affiliation Agreement;
(q) Indebtedness which may be deemed to exist in connection with customary agreements providing for indemnification, purchase price adjustments and similar obligations in connection with the acquisition or disposition of assets in connection with transactions otherwise permitted hereunder;
(r) Subordinated Debt; provided that (w) no Event of Default exists on the date of incurrence thereof or would result therefrom, (x) such Indebtedness does not have any scheduled or mandatory payments of principal amount not prior to exceed the greater date that is three months following the Termination Date (as in effect in the date of $52,850,000 incurrence of such Indebtedness) and 35% (y) after giving effect to such Indebtedness and the use of Consolidated Adjusted EBITDA proceeds thereof, in each case for the Reference Period ending on the last day of the Fiscal Quarter preceding the date on which such Indebtedness is incurred for which financial statements are available pursuant to Section 6.1, (1) the Borrower will be in compliance with the financial covenants set forth in Section 7.1 determined on a pro forma basis as of the last day of such Reference Period and (2) the most recently ended Test Period;
(nconsolidated leverage ratio set forth in Section 7.1(a) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed determined on such pro forma basis would be no greater than 0.25x less than the maximum consolidated leverage ratio set forth in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (iSection 7.1(a) such Indebtedness (A) existed as at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount last day of such Indebtedness does not exceed Fiscal Quarter, it being acknowledged and agreed that the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of required ratio levels to be satisfied will be the levels applicable on the last day of the most recently ended Test PeriodFiscal Quarter in which such Indebtedness is incurred;
(os) additional Indebtedness of MVWC or any of its Subsidiaries in an aggregate principal amount (for MVWC and all Subsidiaries) not to exceed $10,000,000 at any one time outstanding; and
(t) Indebtedness consisting of promissory notes issued by any Group Member relating to MVWC’s European or Asia Pacific businesses incurred under and Guarantee Obligations of the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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) MVWC incurred in connection with the relevant refinancing, refunding hypothecations of or replacement and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness Qualified Securitization Transactions with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans Time Share Receivables relating to resorts within MVWC’s European or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofAsia Pacific businesses.
Appears in 1 contract
Sources: Amendment and Restatement Agreement (Marriott Vacations Worldwide Corp)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $1,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person other than a Group Member);
(b) Indebtedness created hereunder (including pursuant to Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) Indebtedness of any Group Member pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guaranties or similar instruments for the Borrower benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to any Subsidiary and/or Group Member, pursuant to reimbursement or indemnification obligations to such person, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of any Loan Party to any other Group Member, and of any Subsidiary to the Borrower and/or any other SubsidiaryGroup Member (in each case other than any Guaranty by a Loan Party or any other Subsidiary of Non-Recourse Seasoning Debt); providedprovided that any Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this clause (e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of performance bonds, that bid bonds, appeal bonds, surety bonds and completion guaranties and similar obligations, in each case provided in the ordinary course of business or consistent with past practice or industry practices, including those incurred to secure health, safety and environmental obligations in the ordinary course of business;
(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 or other cash management services, in each case incurred in the ordinary course of business;
(i) Indebtedness of a Subsidiary or Loan Party acquired after the Closing Date or a person merged or combined with any Group Member after the Closing Date and Indebtedness otherwise incurred or assumed by any Group Member in connection with the acquisition of all or substantially all of the assets of, or all or substantially all of the Equity Interests (other than directors’ qualifying shares) not previously held by the Group Members in, or merger, consolidation or amalgamation with, a person or a division or line of business of a person or a controlling interest in a person (or any subsequent investment made in a person, division or line of business previously acquired in any such acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (i) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by any Group Member prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of any Subsidiary owing Group Member (including Guaranties by the Group Members (other than the Seasoning Subsidiaries) of Non-Recourse Seasoning Debt) and Permitted Refinancing Indebtedness in respect thereof in an aggregate principal amount for all Indebtedness incurred pursuant to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that this clause (j)(i) not to exceed $200,000,000 at any time outstanding and (ii) Indebtedness of the Borrower to Seasoning Subsidiaries consisting of Non-Recourse Seasoning Debt and any Subsidiary must be unsecured and expressly subordinated Permitted Refinancing Indebtedness (without giving effect to the Obligations final parenthetical in clause (d) of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonablydefinition thereof) (including pursuant to an Intercompany Note)in respect thereof;
(ck) other Indebtedness of any Group Member, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed $200,000,000;
(l) [reserved];
(dm) Guaranties (i) by any Group Member of any Indebtedness of Loan Party permitted to be incurred under this Agreement, (ii) by any Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Loan Party, (iii) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party, and (iv) by any Loan Party of Indebtedness of Subsidiaries that are not Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms; provided that Guaranties by any Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of any agreement Group Member providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including contingent earn-out obligations) outs), in each case, incurred or assumed in connection with investments or the disposition of any Disposition permitted hereunderbusiness, assets, a Loan Party or a Subsidiary not prohibited by this Agreement, other than Guarantees of Indebtedness incurred by any acquisition permitted hereunder or consummated prior to the Closing Date Person acquiring all or any other purchase portion of such business, assets or Capital Stock, and Indebtedness arising from guaranties, letters a Subsidiary for the purpose of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any financing such agreementacquisition;
(eo) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds warehouse receipts or similar instruments issued to support any performance obligations and trade letters of the foregoing items;
credit (f) Indebtedness of the Borrower and/or any Subsidiary other than obligations in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(iother Indebtedness) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of businessindustry practices;
(hp) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06[reserved];
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(r) [reserved];
(i) other Indebtedness so long as the Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the proceeds thereof) is not greater than 4.00 to 1.00; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(t) Indebtedness of Subsidiaries that are not Loan Parties in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this clause (t), would not exceed $50,000,000;
(u) Indebtedness incurred in the ordinary course of business and/or (iii) in respect of obligations of any Group Member to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements 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 or any Hedging Agreements;
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of any Group Member (or any direct or indirect parent thereof) incurred in the ordinary course of business;
(mw) obligations in respect of Cash Management Agreements in the ordinary course of business;
(x) Refinancing Notes and any Permitted Refinancing Indebtedness of the Borrower and/or any Subsidiary with incurred in respect to Capital Leases and purchase money thereof;
(i) Indebtedness in an aggregate outstanding principal amount not to exceed at the greater time of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of incurrence an amount equal to the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that amount determined pursuant to clause (i) of the definition of Incremental Amount at such time; provided that (x) the incurrence of any Indebtedness for borrowed money pursuant to this clause (y)(i) shall be subject to the last paragraph of this Section 6.01, and (y) there shall be no obligor in respect of such Indebtedness (A) existed at the time such Person became that is not a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, Loan Party; and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; provided, that:;
(z) (i) Indebtedness of any Loan Party under Back-to-Back Lending Facilities that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal amount of such any other Indebtedness does outstanding pursuant to this clause (z)(i), would not exceed $150,000,000; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(aa) Indebtedness incurred on behalf of, or representing Guaranties of Indebtedness of, joint ventures in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this clause (aa), would not exceed $50,000,000;
(bb) Indebtedness issued by any Group Member to, or Guaranties of any Indebtedness of, current or former officers, directors and employees (and their respective estates, spouses or former spouses) of any Group Member, Public Company or any of their respective Affiliates, in each case in the ordinary course of business;
(cc) Indebtedness being refinanced, refunded consisting of obligations of any Group Member under deferred compensation or replaced, except other similar arrangements incurred by such Group Member;
(Add) an amount equal Indebtedness of any Group Member to unpaid accrued interest, penalties and premiums or on behalf of any joint venture (including tender premiumsregardless of the form of legal entity) thereon plus underwriting discounts, other reasonable and customary fees, commissions and expenses (including upfront fees, original issue discount or initial yield payments) incurred that is not a Subsidiary arising in the ordinary course of business in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, cash management operations (Bincluding with respect to intercompany self-insurance arrangements) 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 definition (with additional amounts incurred in reliance on this clause (C) constituting a utilization of the relevant basket Group Members;
(ee) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit; and
(ff) (i) all premiums (if any, including tender premiums), expenses, defeasance costs, interest (including post-petition interest), fees, expenses, charges and additional or exception pursuant to which such additional amount is permittedcontingent interest on obligations described in clauses (a) through (ee) above; and (2) if such additional Indebtedness is secured, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) any Permitted Refinancing Indebtedness in respect thereof. For purposes of determining compliance with this Section 6.01, the amount of any Indebtedness denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has incurred (Ain respect of term Indebtedness) a final maturity equal or committed (in respect of revolving Indebtedness) on or prior to or later than (the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Closing Date, does not require mandatory commitment reductionson the date on which such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided that, if any, prior to) the earlier of such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (x) the Latest Maturity Date and (y) the final maturity of or in a different currency from the Indebtedness being refinanced), refunded or replaced and (B) other than with respect such refinancing would cause the applicable Dollar-denominated restriction to revolving Indebtednessbe exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Refinancing Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness has does not exceed (xi) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original or committed principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders oramount, as applicable, of such Indebtedness being refinanced plus (ii) the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
aggregate amount of fees, underwriting discounts, premiums (iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (mincluding tender premiums), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness defeasance costs and other costs and expenses incurred in respect connection with such refinancing. Further, for purposes of Indebtedness permitted under clause (a) of determining compliance with this Section 6.01, (A) Indebtedness need not be permitted solely by reference to one category of permitted Indebtedness described in Sections 6.01(a) through (ff) but may be permitted in part under any combination thereof and (B) in the event that an item of Indebtedness (or any portion thereof) meets the criteria of one or more of the categories of permitted Indebtedness described in Sections 6.01(a) through (ff), the Term Facility Borrower shall, in its sole discretion, classify or reclassify, or later divide, classify or reclassify, such Indebtednessitem of Indebtedness (or any portion thereof) in any manner that complies with this Section 6.01 and will only be required to include the amount and type of such item of Indebtedness (or any portion thereof) in one of the above clauses and such item of Indebtedness shall be treated as having been incurred or existing pursuant to only one of such clauses; provided that all Indebtedness under this Agreement outstanding on the Closing Date shall at all times be deemed to have been incurred pursuant to clause (b) of this Section 6.01. In addition, if securedwith respect to any Indebtedness that was permitted to be incurred hereunder on the date of such incurrence, is secured only by Permitted Liens any Increased Amount of such Indebtedness shall also be permitted hereunder after the date of such incurrence. With respect to any Indebtedness for borrowed money described in Section 6.01(y)(i), (A) the stated maturity date of such Indebtedness shall be no earlier than the latest Maturity Date as in effect at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors and (B) except in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtednesscredit facility, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is Indebtedness shall be no earlier shorter than the Latest remaining Weighted Average Life to Maturity Date applicable to any then-existing of the Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofB Loans.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become or remain liable with suffer to exist any Indebtedness (exclusive of trade debt) except in respect to any Indebtedness, except:
of (a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
Obligations; (b) Indebtedness Capitalized Lease Obligations consisting of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness Capital Lease of the Borrower wet sand plant located in ▇▇▇▇▇▇ County, Wisconsin plus additional Capitalized Lease Obligations in an aggregate amount at any time outstanding not to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
exceed $25,000,000; (c) [reserved];
Permitted Purchase Money Indebtedness; (d) Indebtedness arising from under any agreement providing for indemnification, adjustment of purchase price or similar obligations Hedge so long as such Indebtedness (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior except to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
extent constituting Hedge Liabilities) is unsecured; (e) Indebtedness of the Borrower and/or owing to any other Credit Party or Restricted Subsidiary (i) thereof so long as any such Indebtedness owing to any Person that is not a Credit Party is subordinated pursuant to tendersan agreement reasonably satisfactory to Agent; (f) guarantees permitted under Section 7.3; (g) to the extent not otherwise described in this Section 7.6, statutory Indebtedness set forth on Schedule 7.6 and any Refinancing Indebtedness in respect thereof; (h) Indebtedness in respect of workers’ compensation claims, property casualty or liability insurance, and self-insurance obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
business; (i) guaranties Indebtedness arising from the honoring by the Borrower and/or any Subsidiary a bank or other financial institution of the obligations of suppliersa check, distributors, resellers, customers, licensees and sublicensees draft or similar instrument drawn against insufficient funds in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(ij) Indebtedness of the Borrower and/or Parent Guarantor or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (iik) take-or-pay obligations contained in supply arrangementsIndebtedness arising from agreements of the Parent Guarantor or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with a Disposition permitted under Section 7.1(b) or a Permitted Acquisition, (l) Indebtedness of the Parent Guarantor or any Restricted Subsidiary in connection with 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 Guarantor or a Restricted Subsidiary in the ordinary course of business and/or (iii) or pursuant to self-insurance obligations to reacquire assets or inventory and in each case not in connection with customer financing arrangements in the ordinary course borrowing of business;
money or the obtaining of advances, (m) Indebtedness in the form of senior or subordinated notes, so long as immediately before and after giving effect to the incurrence of any such Indebtedness, and the application of the Borrower and/or any Subsidiary use of proceeds therefrom: (i) no Event of Default shall have occurred or be continuing or shall be caused thereby; (ii) after giving effect to the incurrence of such Indebtedness and the use of proceeds therefrom, Parent Guarantor and its Restricted Subsidiaries shall be in compliance on a Pro Forma Basis with respect to Capital Leases and purchase money Indebtedness the covenants then in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA effect set forth in Section 6.5 as of the last day of the fiscal quarter most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary on or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject prior to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the such incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life which financial statements have been provided to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofAgent pursuant to
Appears in 1 contract
Sources: Revolving Credit and Security Agreement (Emerge Energy Services LP)
Indebtedness. The Borrower shall will not, nor shall will it permit any of its Subsidiaries Restricted Subsidiary to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, exceptIndebtedness other than:
(a) Indebtedness under the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Loan Documents;
(b) (i) Indebtedness of outstanding on the Closing Date as set forth on Schedule 6.01(b) and any Permitted Refinancing Indebtedness in respect thereof and (ii) Indebtedness owed by the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be and its Restricted Subsidiaries permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)6.04;
(c) [reserved]Guarantees by the Borrower or any Restricted Subsidiary of Indebtedness of the Borrower or any other Restricted Subsidiary; provided that the Indebtedness so Guaranteed is otherwise permitted to be incurred by the Borrower or such Restricted Subsidiary under this Section 6.01;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of by the Borrower or any Restricted Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guarantiesguarantees, bankers’ acceptances, warehouse receipts or similar instruments issued or created, or relating to obligations or liabilities incurred, in the ordinary course of business 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;
(e) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance bonds or and completion guarantees and similar instruments to support any obligations (other than in respect of other Indebtedness for borrowed money), in each case provided in the foregoing itemsordinary course of business;
(f) Indebtedness in respect of non-speculative Swap Contracts relating to the business or operations of the Borrower and/or or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programsRestricted Subsidiary;
(ig) guaranties Indebtedness arising from the honoring by the Borrower and/or any Subsidiary a bank or financial institution of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees a check or similar instrument drawn against insufficient funds in the ordinary course of business, so long as such Indebtedness is repaid within five Business Days;
(ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iiih) Indebtedness in respect of letters of credit, bankers’ acceptancesguarantees, bank guaranties counter-indemnities and short term facilities incurred by any Restricted Subsidiary engaged in clearing operations in connection with the ordinary clearing, depository and settlement procedures (including, without limitation, any letter of credit or similar instruments supporting trade payablesguarantees provided to any central securities depositories or external custodians) relating thereto; provided that any advances thereunder are repaid within 10 days following the date of such advance or any drawing under any letter of credit or guarantee;
(i) any Indebtedness of any clearing house incurred in connection with arrangements related to any clearing operations where such Indebtedness arises under the rules, warehouse receipts normal procedures, agreements or similar facilities entered into legislation governing the clearing operations or such clearing house; provided that any loans, advances or other outstanding Indebtedness thereunder are repaid within 10 days following the date on which such loan or advance was made or any other such Indebtedness was incurred;
(j) Indebtedness of Regulated Subsidiaries or any direct or indirect parent of any such Regulated Subsidiary that does not increase regulatory capital incurred to satisfy such Regulated Subsidiary’s determination of any requirement imposed at any time or from time to time by any Governmental Authority;
(k) Indebtedness consisting of the financing of insurance premiums in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;.
(i) Indebtedness of the Borrower and/or or any Restricted Subsidiary existingconsisting of purchase money Indebtedness for purposes of acquiring fixed or capital assets and Capital Lease Obligations; provided that immediately after giving effect to the incurrence of such Indebtedness, or the Borrower would be in compliance on a Pro Forma Basis with the Financial Covenants as of the most recent test date for which financial statements have been delivered pursuant to commitments existing, on the Closing Date; provided, that paragraph (a) or (b) of Section 5.01 and (ii) any such Permitted Refinancing Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01respect thereof;
(j) Surety Bond Indebtedness;
(km) Indebtedness arising from agreements of the Borrower and/or or any Restricted Subsidiary consisting providing for indemnification, adjustment of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense purchase or acquisition price or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangementsobligations, in each case, incurred or assumed in connection with any acquisition, Investment or the disposition of any business, assets or a Restricted Subsidiary not prohibited by this Agreement;
(n) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of 105% of the stated amount of such Letter of Credit;
(o) Indebtedness representing deferred compensation or similar arrangements to any future, present or former employees, directors, officers, managers, members, partners, independent contractors or consultants of the Borrower (or any direct or indirect parent ,including Public Company Parent, thereof) or any of its Restricted Subsidiaries incurred in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection consistent with customer financing arrangements in the ordinary course of businesspast practice;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(op) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current future, present or former directorofficers, officermanagers, employeemembers, member of managementindependent contractors, manager or consultant of any Parent Companyconsultants, the Borrower or any Subsidiary (or directors and employees, their respective Controlled Investment Affiliates or Immediate Family Members) , in each case, to finance the purchase or redemption of Capital Stock Equity Interests of the Borrower or any Parent direct or indirect parent (including Public Company Parent) permitted by Section 6.04(a)6.05;
(pq) 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 in connection with deposit accounts;
(r) Indebtedness refinancingattributable to (but not incurred to finance) the exercise of appraisal rights and the settlement of any claims or actions (whether actual, refunding contingent or replacing potential) with respect thereto;
(s) Indebtedness of non-Loan Parties and other secured or unsecured Indebtedness in an aggregate principal amount outstanding not to exceed the greater of $125,000,000 and 50.0% of LTM Consolidated EBITDA (at the time of incurrence) and, without duplication, any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; provided, that:;
(i) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded Borrower or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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, Guarantor that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), either (x)) unsecured, (y) and/or (bb) (other than Customary Bridge Loans secured on a junior lien basis with the Obligations or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder Obligations; provided, in each case, that are secured on a First Priority Lien basis (I) such Indebtedness complies with respect to the Collateral may participate in Applicable Requirements, (xII) any voluntary prepayment no Default or Event of Term Loans as set forth in Section 2.11(a)(i) Default shall have occurred and be continuing and (yIII) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as immediately after giving effect thereto to the incurrence of such Indebtedness, the Borrower would be in compliance on a Pro Forma Basis as with the Financial Covenants; and (ii) Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness arising from Permitted Intercompany Activities; and
(v) all premiums (if any), interest (including post-petition interest and paid-in-kind interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (u) above. For purposes of determining compliance with this Section 6.01, in the event that an item of Indebtedness meets the criteria of more than one of the last day categories of Indebtedness described above, the Borrower may, in its sole discretion, classify all or a portion of such item of Indebtedness or any portion thereof in a manner that complies with this Section 6.01 and will only be required to include the amount and type of such Indebtedness in one or more of the most recently ended Test Periodabove clauses; provided that all Indebtedness outstanding under the Loan Documents and, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred andany Permitted Refinancing thereof, will at all times be deemed to be outstanding in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien reliance only on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described exception in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofSection 6.01(a).
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date and (including other than in the case of any Additional Term Loans existing letters of credit to be replaced with Letters of Credit issued hereunder) set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a Person not affiliated with Holdings or any Subsidiary);; 105
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]Indebtedness of Holdings and the Subsidiaries pursuant to Swap Agreements permitted by Section 6.13;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of the Borrower benefit of) any Person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance to Holdings or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementPerson, provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers' compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the any Borrower and/or or any Subsidiary to the extent permitted by Section 6.04, provided that Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party (ithe "Subordinated Intercompany Debt") pursuant shall be subordinated to tendersthe Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of performance bonds, statutory warranty bonds, bid bonds, appeal bonds, surety bonds and completion or performance guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) Indebtedness arising out of advances on exports, advances on imports, advances on trade receivables, customer prepayments and similar transactions in respect the ordinary course of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsbusiness and consistent with past practice;
(fg) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programs;
(i) guaranties by instrument drawn against insufficient funds in the Borrower and/or any Subsidiary ordinary course of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees business or other cash management services in the ordinary course of business, provided that (iix) such Indebtedness incurred in the ordinary course (other than credit or purchase cards) is extinguished within three Business Days of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services its incurrence and (iiiy) such Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties credit or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment purchase cards is permitted under Section 6.06extinguished within 60 days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a Person merged into or consolidated with a Borrower and/or or any Subsidiary existingafter the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness, provided that the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger or consolidation, such assumption or such incurrence, as applicable (together with Indebtedness outstanding pursuant to commitments existingthis paragraph (h), on paragraph (i) of this Section 6.01 and the Closing DateRemaining Present Value of outstanding leases permitted under Section 6.03), would not exceed 3.75% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition, merger or consolidation, such assumption or such incurrence, as applicable, for which financial statements have been delivered pursuant to Section 5.04; provided106
(i) Capital Lease Obligations, that mortgage financings and purchase money Indebtedness incurred by Holdings or any Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Permitted Refinancing Indebtedness in excess respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (h) of $5,000,000 shall be described on Schedule this Section 6.01, this paragraph (i) and the Remaining Present Value of leases permitted under Section 6.03) would not exceed 3.75% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(j) Surety Bond IndebtednessCapital Lease Obligations incurred by Holdings or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) Indebtedness other Indebtedness, in an aggregate principal amount at any time outstanding pursuant to this paragraph (k) not in excess of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businessU.S.$40.0 million;
(l) Indebtedness of the Domestic Borrower and/or pursuant to the Senior Subordinated Notes in an aggregate principal amount that is not in excess of the sum of U.S.$420.0 million and any Subsidiary consisting Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness in the form of Permitted Subordinated Debt Securities;
(m) Guarantees (i) by the financing Loan Parties of insurance premiumsthe Indebtedness of the Domestic Borrower described in paragraph (l), (ii) take-or-pay by any Loan Party of any Indebtedness of any Borrower or any Loan Party expressly permitted to be incurred under this Agreement, (iii) by any Borrower or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of any Borrower or any Subsidiary that is not a Loan Party to the extent permitted by Section 6.04, (iv) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party; provided that all Foreign Subsidiaries may guarantee obligations contained in supply arrangementsof other Foreign Subsidiaries under ordinary course cash management obligations, in each case, and (v) by any Borrower of Indebtedness of Foreign Subsidiaries incurred for working capital purposes in the ordinary course of business and/or on ordinary business terms so long as such Indebtedness is permitted to be incurred under 6.01(a), (iiik) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course (s); provided that Guarantees by any Loan Party under this Section 6.01(m) of business;
(m) any other Indebtedness of a Person that is subordinated to other Indebtedness of such Person shall be expressly subordinated to the Borrower and/or any Subsidiary Obligations on terms consistent with respect those used, or to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Periodbe used, for Subordinated Intercompany Debt;
(n) Indebtedness arising from agreements of Holdings or any Person that becomes a Subsidiary providing for indemnification, adjustment of purchase price, earn outs or Indebtedness similar obligations, in each case, incurred or assumed in connection with the disposition of any acquisition business, assets or similar Investment permitted hereunder after the Closing Date; provideda Subsidiary, that (i) other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such Indebtedness (A) existed at the time such Person became business, assets or a Subsidiary or for the assets subject to purpose of financing such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Periodacquisition;
(o) Indebtedness consisting of promissory notes issued by in connection with Permitted Receivables Financings; provided that the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by proceeds thereof are applied in accordance with Section 6.04(a2.11(c);; 107
(p) Indebtedness refinancing, refunding letters of credit or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) bank guarantees (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (ALetters of Credit issued pursuant to Section 2.05) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does having an aggregate face amount not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii)U.S.$40.0 million;
(q) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit;
(r) Indebtedness consisting of Permitted Subordinated Debt Securities or Permitted Senior Debt Securities to the extent, in each case, the Net Proceeds in respect thereof are actually utilized to repay Term Borrowings;
(s) Indebtedness of Foreign Subsidiaries (including letters of credit or bank guarantees (other than Letters of Credit issued pursuant to Section 2.05)) for working capital purposes incurred by in the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date ordinary course of business on ordinary business terms in an outstanding principal aggregate amount not to exceed U.S.$40.0 million outstanding at any time;
(t) Indebtedness of Holdings or any of its Subsidiaries in respect of the Management Notes in an aggregate amount not to exceed $20 million outstanding at any time; and
(u) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in paragraphs (a) the Fixed Incremental Amount plus through (bs) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof above.
(in each case, without “netting” the cash proceeds of the applicable v) intercompany Indebtedness being incurred and, in the case of any revolving indebtednessBorrower or any other Subsidiary to the extent described on Annex A. Notwithstanding anything to the contrary herein, assuming a full utilization thereofHoldings shall not be permitted to incur any Indebtedness other than Indebtedness under Sections 6.01(b), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofm).
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
: (a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Amendment No. 67 Effective Date and set forth on Schedule 7.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with such Borrower or any Subsidiary);; (b)
(bi) Indebtedness created hereunder and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; and (ii) Guarantees by the Borrowers and the Material Subsidiaries of the Borrower to Indebtedness of Ultimate Parent, Parent Guarantor or any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiarythereof; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligationsor otherwise) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder arising under a Swap Contract if such obligations are (or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any were) entered into by such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 Person in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates, commodity prices or foreign exchange rates (or to allow any customer to do so); provided, however, to the extent that such Indebtedness is incurred under a Secured Hedge Agreement, such Secured Hedge Agreement was entered 130 into in connection with the execution of customer contracts to hedge currency and commodity risk thereunder; (iid) Indebtedness owed to (including obligations in respect of letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or or any Subsidiary Subsidiary, pursuant to reimbursement or indemnification obligations to such person, in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case in the ordinary course of business; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence; (iie) unsecured Indebtedness of any Borrower to the Ultimate Parent, any Subsidiary of Ultimate Parent or any Subsidiary and of any Subsidiary to Ultimate Parent, any Subsidiary of Ultimate Parent, the Borrowers or any other Subsidiary; provided that, except in respect of intercompany current liabilities incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods the cash management operations among Ultimate Parent and services and (iii) Indebtedness in respect of letters of creditits subsidiaries, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary Loan Party to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted Person incurred under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 (Ce) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens ABL Credit Obligations on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated terms reasonably satisfactory to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii)Administrative Agent;
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Credit Agreement (Constellium Se)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred Company in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase Letters of assets or Capital Stock, Credit and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Agreement;
(i) Indebtedness of (i) the Borrower and/or Company to any Subsidiary existing, and (ii) any Subsidiary to the Company or pursuant any other Subsidiary to commitments existing, on the Closing Date; provided, that any such extent the Indebtedness referred to in excess of $5,000,000 shall be described on Schedule 6.01this clause 13.2(b)(ii) evidences a loan or advance permitted under subsection 13.7;
(j) Surety Bond Indebtedness;
(kc) Indebtedness of the Borrower and/or Company evidenced by the Company Subordinated Note and any Subsidiary consisting Indebtedness in respect of obligations owing under incentive (including dealer incentivenotes issued after the Closing Date evidencing additional loans made by HoldCo to the Company as contemplated by subsection 13.7(o), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(ld) Indebtedness in respect of the Borrower and/or any Subsidiary derivatives contracts permitted by subsection 13.11;
(e) Indebtedness consisting of (i) the financing reimbursement obligations under surety, indemnity, performance, release and appeal bonds and guarantees thereof and letters of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, credit required in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements the enforcement of rights or claims of the Company or its Subsidiaries, in each case to the extent a Letter of Credit supports in whole or in part the obligations of the Company and its Subsidiaries with respect to such bonds, guarantees and letters of credit;
(f) [INTENTIONALLY OMITTED];
(g) Indebtedness owed to a seller in a Permitted Acquisition or a Permitted Joint Venture or to a buyer in a disposition permitted under clauses (e), (f) or (h) of subsection 13.6 that (i) relates to customary post-closing adjustments with respect to accounts receivable, accounts payable, net worth and/or similar items typically subject to post-closing adjustments in similar transactions, and are outstanding for a period of two (2) years or less following the creation thereof or (ii) relates to indemnities granted to the seller or buyer in the transaction;
(h) other Indebtedness of the Company or any of its Subsidiaries incurred in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness their respective businesses in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of 250,000,000 at any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Datetime; provided, provided that (i) such no more than $50,000,000 of Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as Subsidiaries of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts permitted to be incurred pursuant to this Section 6.01 paragraph (providedh) may be outstanding at any time, that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (after the Revolving Credit Termination Date and, in the case of revolving if term Indebtedness, does not require mandatory commitment reductions, if any, prior to) has a longer average life than the earlier of (x) the Latest Maturity Date and (y) the final maturity remaining life of the Indebtedness being refinancedRevolving Credit Facility, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness contains terms that are no more restrictive than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to set forth in this Agreement effectuated in reliance on Section 9.02(d)(ii)),
and (iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to application of proceeds the Collateral shall Company would be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu in compliance with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as covenants set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans subsection 13.1 as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Periodcompleted period of four consecutive fiscal quarters ending prior to such incurrence for which the financial statements and certificates required by subsections 12.1 and 12.2 have been delivered or for which comparable financial statements have been filed with the Securities and Exchange Commission, after giving pro forma effect to such transaction and to any other event occurring after such period as to which pro forma recalculation is appropriate (including the application any other transaction described in subsections 13.6 and 13.7 occurring after such period) as if such incurrence had occurred as of the proceeds thereof first day of such period. All pro forma calculations required to be made pursuant to this paragraph shall (i) include only those adjustments that are based on reasonably detailed written assumptions reasonably acceptable to the Administrative Agent and (ii) be certified to by a Responsible Officer as having been prepared in each case, without “netting” the cash proceeds good faith based upon reasonable assumptions;
(i) existing Indebtedness of the applicable Company or any of its Subsidiaries listed on Schedule 13.2 hereto including any extension or renewals or refinancing thereof, provided the principal amount thereof is not increased;
(j) Indebtedness being incurred andon any date of the Company or any of its Subsidiaries assumed or issued in connection with a Permitted Acquisition (or, in the case of any revolving indebtednessPermitted Acquisition involving the purchase of capital stock or other equity interests in any Person, assuming a full utilization Indebtedness of such Person remaining outstanding after such Permitted Acquisition) and any extension or renewal thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if provided that the aggregate principal amount of such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does shall not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00$50,000,000; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(Bk) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined HoldCo evidenced by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofHoldCo Notes.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party under the Secured Obligations Loan Documents (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term LoansIndebtedness in respect of Revolver Commitment Increases);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Swap Agreements not incurred for speculative purposes;
(c) [reserved]Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, securing unemployment insurance and other social security laws or regulation, health, disability or other employee benefits, salary, wages or other compensation or property, casualty or liability insurance or self-insurance or other similar obligations to the Lead Borrower or any Restricted Subsidiary;
(d) Indebtedness arising from of any agreement providing for indemnification, adjustment Borrower to any Restricted Subsidiary and of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, Restricted Subsidiary to any acquisition permitted hereunder or consummated prior to the Closing Date Borrower or any other purchase Subsidiary, provided that (i) Indebtedness of assets or Capital Stock, any Restricted Subsidiary that is not a Subsidiary Loan Party to the Loan Parties shall be permitted under Section 6.04(b) and (ii) (A) Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Lead Borrower or and of any other Loan Party to any Subsidiary that is not a Subsidiary Loan Party (the “Subordinated Intercompany Debt”) shall be subordinated to the Obligations on terms reasonably acceptable to the Administrative Agent and (B) all such Indebtedness shall be evidenced by intercompany promissory notes and such notes owned or held by a Loan Party shall be pledged as Collateral pursuant to any such agreementthe Collateral Agreement;
(e) Indebtedness in respect of the Borrower and/or any Subsidiary bids, trade contracts (i) pursuant to tendersother than for debt for borrowed money), leases (other than Capital Lease Obligations), statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customscustoms and appeal bonds, appealperformance, performance and/or and completion and return of money bonds or other bonds, government contracts, financial assurances and completion guarantees and similar obligations, in each case provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations incurred in the ordinary course of business and (ii) including Indebtedness in respect of letters of credit, bank guaranties, surety bonds, performance bonds guarantees or similar instruments in lieu of such items to support any of the foregoing itemsissuance thereof);
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management Management Obligations and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) other Indebtedness in respect of letters of creditnetting services, bankers’ acceptances, bank guaranties or overdraft protection and similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businesscash management and deposit accounts;
(mg) (x) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary assumed or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 Permitted Business Acquisitions or any acquisition permitted under this Agreement, and provided that (A) immediately before and after giving effect to the relevant refinancingassumption or incurrence of such Indebtedness, refunding or replacement no Event of Default shall have occurred and the related refinancing transactionbe continuing, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to assumed, such Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens exists at the time of such refinancing, refunding Permitted Business Acquisition (or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), other permitted acquisition) and if the Liens securing is not created in contemplation of such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole event or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(viii) in the case of Replacement DebtIndebtedness incurred, (AI) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other matures no earlier than the Collateraldate that is, at the time of such incurrence, ninety-one (C91) if days after the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person Revolver Termination Date and (DII) such Refinancing Indebtedness is incurred under (immediately before and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basisincurrence thereof, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofexceed
Appears in 1 contract
Sources: Credit Agreement (Ollie's Bargain Outlet Holdings, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $2,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to tendersthe Loan Parties shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the global intercompany note substantially in the form of Exhibit J hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business or consistent with past practice or industry practices;
(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 or other cash management services, in each case incurred the ordinary course of business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests, where such acquisition, merger or consolidation is not prohibited by this Agreement (including a Permitted Business Acquisition); provided, that, (x)(I) the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof, and any related transactions is no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, and (II) the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the net cash proceeds of such Indebtedness incurred on such date against the applicable amount of Consolidated Debt for purposes of such calculation), and any related transactions is not greater than 4.50 to 1.00 or (y) the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions is no greater than the Total Net Leverage Ratio in effect immediately prior thereto; provided that (1) the incurrence of any Indebtedness for borrowed money pursuant to this clause (h)(i) incurred in contemplation of such acquisition, merger or consolidation (except for any seller note or other seller financing) shall be subject to the last paragraph of this Section 6.01 and (2) the aggregate outstanding principal amount of Indebtedness permitted under this clause (h)(i) incurred by a Subsidiary other than a Subsidiary Loan Party in contemplation of such acquisition, merger or consolidation, together with the aggregate principal amount of Indebtedness of a Subsidiary other than a Subsidiary Loan Party then outstanding pursuant to Section 6.01(s)(i), shall not exceed the greater of $10,000,000 and 4.25% of Consolidated Total Assets as at the end of the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed (A) the greater of $10,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period plus (B) any additional amounts, so long as immediately after giving effect to the incurrence of such additional amounts under this clause (B) and the use of proceeds thereof, the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 4.50 to 1.00, and (y) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations incurred by the Borrower or any Subsidiary in respect of obligations any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) other Indebtedness of the Borrower and/or or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $10,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(l) [Reserved];
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to pay be incurred under this Agreement, (ii) by the deferred Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(hp) Guarantees by the Borrower and/or any Subsidiary of other Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary Disqualified Stock of the Borrower or any Subsidiaries in an aggregate outstanding principal amount or liquidation preference not greater than 100.0% of the net cash proceeds received by the Borrower from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the net cash proceeds from the issuance and sale by Holdings or any joint ventureParent Entity of its Qualified Equity Interests or a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the related Investment is permitted under Section 6.06Borrower or any of its Subsidiaries and other than Permitted Cure Securities), to the extent that such net cash proceeds do not increase the Cumulative Credit and do not constitute Excluded Contributions;
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(i) Indebtedness secured by Liens on the Collateral ranking pari passu with the Liens on the Collateral securing the Term B Loans so long as (x) at the time of incurrence thereof, no Default or Event of Default shall have occurred and be continuing and (y) immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 3.75
to 1. 00; provided that, (1) the net cash proceeds of Indebtedness incurred under this clause (r) at such time shall not be netted against the applicable amount of Consolidated Debt for purposes of such calculation of the Net First Lien Leverage Ratio and (2) the incurrence of any Indebtedness pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) other Indebtedness so long as (x) at the time of incurrence thereof, no Default or Event of Default shall have occurred and be continuing, (y) immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Total Net Leverage Ratio on a Pro Forma Basis is not greater than 4.50 to 1.00 and (z) the aggregate principal amount of Indebtedness permitted under this clause (s)(i) incurred by a Subsidiary other than a Subsidiary Loan Party, together with the aggregate principal amount of Indebtedness of a Subsidiary other than a Subsidiary Loan Party then outstanding pursuant to Section 6.01(h)(i) incurred in contemplation of an acquisition, merger or consolidation, shall not exceed the greater of $10,000,000 and 4.25% of Consolidated Total Assets as at the end of the then most recently ended Test Period; provided that, (1) the net cash proceeds of Indebtedness incurred under this clause (s) at such time shall not be netted against the applicable amount of Consolidated Debt for purposes of such calculation of the Total Net Leverage Ratio and (2) the incurrence of any Indebtedness pursuant to this clause (s)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(t) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $10,000,000 and 4.25% of the Consolidated Total Assets as at the end of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness incurred in the ordinary course of business and/or (iii) in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements 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 or any Hedging Agreements.
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower (or, to the extent such work is done for the Borrower or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(mw) Indebtedness in connection with Permitted Receivables Financings;
(x) obligations in respect of the Borrower and/or Cash Management Agreements;
(y) Refinancing Notes and any Subsidiary with Permitted Refinancing Indebtedness incurred in respect to Capital Leases and purchase money thereof;
(i) Indebtedness in an aggregate outstanding principal amount outstanding not to exceed at the greater time of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of incurrence the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DateIncremental Amount available at such time; provided, that (i1) there shall be no obligor in respect of any such Indebtedness that is not a Loan Party and (A2) existed at the time such Person became a Subsidiary or the assets incurrence of any Indebtedness pursuant to this clause (z)(i) shall be subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(aa) Guarantees of Indebtedness under ordinary course customer financing lines or credit;
(bb) Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures in an aggregate principal amount that, immediately after giving effect to the incurrence thereof, together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(bb), would not exceed the greater of $20,000,000 10,000,000 and 254.25% of the Consolidated Adjusted EBITDA Total Assets as at the end of the last day of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(occ) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pdd) Indebtedness refinancing, refunding consisting of obligations of the Borrower or replacing any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(ee) Indebtedness permitted under clauses of the Borrower or any Subsidiary to or on behalf of any joint venture (a), regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bbincluding with respect to intercompany self-insurance arrangements) and/or of the Borrower and its Subsidiaries;
(ff) Indebtedness supported by a Letter of this Section 6.01 (Credit, in any case, including any refinancing Indebtedness incurred a principal amount not in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) excess of the principal stated amount of such Indebtedness does not exceed the principal amount Letter of the Indebtedness being refinancedCredit; and
(gg) all premium (if any, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discountsexpenses, other reasonable and customary defeasance costs, interest (including post-petition interest), fees, commissions expenses, charges and expenses additional or contingent interest on obligations described in clauses (including upfront fees, original issue discount a) through (ff) above or initial yield payments) incurred in connection refinancings thereof. For purposes of determining compliance with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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 secured6.01, the Lien securing such amount of any Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (andeffect, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofrespe
Appears in 1 contract
Sources: Incremental Assumption Agreement (AP Gaming Holdco, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including any Additional Term Loans to the extent such Indebtedness is set forth on Schedule 6.01 to the Original Credit Agreement) and any Additional Opco Revolving Facility Repayment Term Loans)Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Sections 2.22, 2.23 and 2.24) and under the other Loan Documents and any Refinancing Notes incurred to refinance such Indebtedness;
(c) [reserved]Indebtedness of the Dutch Borrower or any Subsidiary pursuant to Swap Agreements not entered into for speculative purposes;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower Borrowers or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business;
(e) Indebtedness of the Dutch Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations Dutch Borrower and of suppliers, distributors, resellers, customers, licensees and sublicensees any Subsidiary to the Dutch Borrower or any other Subsidiary; provided that other than in the case of intercompany current liabilities incurred in the ordinary course of business, (i) Indebtedness of any Subsidiary of the Dutch Borrower that is not a Loan Party owing to any Loan Party shall be subject to Section 6.04 and, at the request of the Collateral Agent, evidenced by an intercompany note pledged to the Collateral Agent for the benefit of the Secured Parties and (ii) Indebtedness incurred of any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, in each case provided in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and industry practices;
(iiig) Indebtedness in respect arising from the honoring by a bank or other financial institution of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payables, warehouse receipts instrument drawn against insufficient funds in the ordinary course of business or similar facilities entered into other cash management services in the ordinary course of business;
(h) Guarantees by Indebtedness of a Subsidiary acquired after the Closing Date or an entity merged into or consolidated with the Dutch Borrower and/or or any Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets after the Closing Date, which In debtedness in each case exists at the time of such acquisition, merger, consolidation or amalgamation and is not created in contemplation of such event and where such acquisition, merger, consolidation or amalgamation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided that (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) immediately after giving effect to such acquisition, merger, consolidation or amalgamation, the assumption and incurrence of any Indebtedness and any related transactions, the aggregate principal amount of such Indebtedness, when taken together with any other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this paragraph (h) and paragraph (i) of this Section 6.01 by and the Borrower or such Subsidiary, as applicable, or other obligations Remaining Present Value of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is leases permitted under Section 6.066.03, would not exceed the greater of $150,000,000 and 15% of Consolidated Total Assets in the aggregate at any time outstanding as of the most recent Test Period;
(i) (i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Dutch Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, (ii) any Permitted Refinancing Indebtedness in respect thereof, and (iii) Capital Lease Obligations incurred by the Dutch Borrower and/or or any Subsidiary existingin respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03 so long as the aggregate principal amount of such Indebtedness, or when taken together with any other Indebtedness incurred pursuant to commitments existingparagraph (h) and this paragraph (i) of this Section 6.01 and the Remaining Present Value of leases permitted under Section 6.03, on would not exceed the Closing Date; provided, that any such Indebtedness in excess greater of $5,000,000 shall be described on Schedule 6.01150,000,000 and 15% of Consolidated Total Assets in the aggregate at any time outstanding as of the most recent Test Period;
(j) Surety Bond Indebtednessother Indebtedness of the Dutch Borrower or any Subsidiary in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, would not exceed $200,000,000 at any time outstanding;
(k) Indebtedness pursuant to (i) the Second Lien Credit Agreement in an aggregate principal amount that is not as of the Amendment Effective Date in excess of $210,000,000 plus (ii) the Incremental Second Lien Term Facility, if any, pursuant to the terms of the Second Lien Credit Agreement as in effect on the Closing Date and (iii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness referred to in the foregoing subsections (i) and (ii);
(l) Guarantees (i) by the Dutch Borrower and/or or any Subsidiary consisting Loan Party of obligations owing any Indebtedness of any Subsidiary Loan Party permitted to be incurred under incentive this Section 6.01, (ii) by the Dutch Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04, and (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party; provided that Guarantees by the Dutch Borrower or any Subsidiary Loan Party under this Section 6.01(l) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be subordinated to the Obligations to at least the same extent such other Indebtedness is so subordinated;
(m) Indebtedness arising from agreements of the Dutch Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price (including dealer incentiveearn-out obligations), supply, distribution, resale, vendor, license, sublicense deferred compensation or similar agreements entered into obligations, in each case, incurred or assumed in connection with the 2014 Transactions and any Permitted Business Acquisition, any Investment or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that in respect of the disposition of any business, assets or a Subsidiary, such Indebtedness shall not exceed the proceeds of such disposition;
(n) Indebtedness in respect of letters of credit, bank guarantees or similar instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness and consistent with past practice or industry practices;
(lo) Indebtedness of the Dutch Borrower and/or or any Subsidiary Loan Party supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit;
(p) Indebtedness consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(mq) other unsecured Indebtedness or Subordinated Indebtedness of the Dutch Borrower and/or or any Subsidiary with respect so long as (A) no Default or Event of Default shall have occurred and be continuing and (B) on a Pro Forma Basis after giving effect to Capital Leases the issuance, incurrence or assumption of such Indebtedness, the Fixed Charge Coverage Ratio shall be equal to or greater than 2.00 to 1.00 and purchase money (ii) Permitted Refinancing Indebtedness in an respect thereof; provided, however, that Indebtedness of Subsidiaries that are not Loan Parties that is outstanding pursuant to this clause (q) and clause (r) shall not at any time exceed $100,000,000 in the aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(nr) Indebtedness of Subsidiaries that are not Loan Parties in an aggregate amount not to exceed $100,000,000 at any Person that becomes a Subsidiary time outstanding pursuant to clause (q) or this clause (r);
(s) Indebtedness assumed incurred in connection the ordinary course of business under overdraft facilities and Cash Management Agreements (including, but not limited to, intraday, ACH, credit cards, credit card processing charges, debit cards and purchasing card/T&E services), in each case established for the Dutch Borrower’s and the Subsidiaries’ ordinary course of operations;
(t) customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business; and
(u) all premium (if any, including tender premiums), expenses, interest (including post-petition interest) and fees, expenses, charges and additional or contingent interest, on obligations described in paragraphs (a) through (t) above. For purposes of determining compliance with this Section 6.01, the amount of any acquisition Indebtedness denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of such Indebtedness incurred (in respect of term Indebtedness) or similar Investment permitted hereunder committed (in respect of revolving Indebtedness) on or prior to the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Closing Date, on the date that such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); providedprovided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (or in a different currency from the Indebtedness being refinanced), that and such refinancing 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 refinancing, 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 (i) the outstanding or committed principal amount, as applicable, of such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and being refinanced plus (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorfees, officerunderwriting discounts, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties and premiums (including tender premiums) thereon plus underwriting discounts, and other reasonable and customary fees, commissions costs and expenses (including upfront fees, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Closing Date and set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower other Loan Documents and any Permitted Refinancing Indebtedness incurred to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, Refinance such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Swap Agreements;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business; provided, that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or to Holdings (prior to a Borrower Qualified IPO) or any Subsidiary and of any Subsidiary to Holdings (i) pursuant prior to tendersa Borrower Qualified IPO), statutory obligationsthe Borrower or any other Subsidiary; provided, bidsthat, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred than in the ordinary course case of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness intercompany current liabilities incurred in the ordinary course of business in respect connection with the cash management operations of obligations Holdings and the subsidiaries to finance working capital needs of the subsidiaries, (i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to the Loan Parties shall be subject to Section 6.04(b) and (ii) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and Indebtedness of any other Loan Party to pay Holdings or any Subsidiary that is not a Subsidiary Loan Party (the deferred “Subordinated Intercompany Debt”) shall, if legally permissible, be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness (including obligations in respect of letters of credit and bank guarantees) in respect of performance, bid, appeal and surety bonds and completion guarantees provided by the Borrower or any of its Subsidiaries in the ordinary course of business or consistent with past practice or industry practice;
(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 or other cash management services in the ordinary course of business; provided, that (x) such Indebtedness (other than credit or purchase price cards) is extinguished within ten Business Days of goods notification to the Borrower of its incurrence and (y) such Indebtedness in respect of credit or services purchase cards is extinguished within 60 days from its incurrence;
(h) (i) Indebtedness of a Subsidiary acquired after the Closing Date or progress payments of an entity merged into or consolidated or amalgamated with the Borrower or any Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case exists at the time of such goods acquisition, merger, consolidation or amalgamation and services is not created in contemplation of such event and where such acquisition, merger, consolidation or amalgamation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided, (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (B) immediately after giving effect to such acquisition, merger, consolidation or amalgamation, the assumption and incurrence of any Indebtedness and any related transactions, the Senior Secured Leverage Ratio on a Pro Forma Basis shall not be greater than 4.25 to 1.00;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the construction, acquisition, lease or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interests of any person owning such property) permitted under this Agreement in order to finance such construction, acquisition, lease or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the Remaining Present Value of outstanding leases permitted under Section 6.03, would not exceed the greater of $550.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(j) Capital Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03, and any Permitted Refinancing Indebtedness in respect thereof;
(k) other Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount outstanding that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of $550.0 million and 5.0% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(l) Indebtedness of the Borrower pursuant to (i) the Senior Unsecured Notes in an aggregate principal amount that is not in excess of $2,250.0 million (plus any interest paid by increases to principal), (ii) the Senior Subordinated Notes in an aggregate principal amount that is not in excess of $900.0 million, and (iii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(m) Guarantees (i) by the Subsidiary Loan Parties of the Indebtedness of the Borrower described in Section 6.01(l), so long as the Guarantee of the Senior Subordinated Notes or any Permitted Refinancing Indebtedness in respect thereof is subordinated on substantially the same terms as set forth in the Senior Subordinated Notes Indenture with respect to the Senior Subordinated Notes, (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (iii) by the Borrower or any Subsidiary Loan Party of Indebtedness of Holdings (prior to a Borrower Qualified IPO) or any Subsidiary that is not a Subsidiary Loan Party that is otherwise permitted hereunder to the extent such Guarantees are permitted by Section 6.04(b), (iv) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party and (v) by the Borrower or any Subsidiary Loan Party of Indebtedness of Subsidiaries that are not Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(s) and to the extent such Guarantees are permitted by 6.04(b); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Obligations to at least the same extent as the Guarantee of the Senior Subordinated Notes is under the Senior Subordinated Notes Indenture;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the Transactions, any Permitted Business Acquisition or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(o) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations (other than obligations in respect of other Indebtedness) and trade letters of credit in the ordinary course of business;
(hp) Guarantees Indebtedness supported by the Borrower and/or any Subsidiary a Letter of Indebtedness or other obligations Credit, in a principal amount not in excess of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or stated amount of such Subsidiary, as applicable, or other obligations Letter of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Credit;
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or business;
(iiii) other Indebtedness incurred by the Borrower or any Subsidiary Loan Party so long as (A) no Default or Event of Default shall have occurred and be continuing or would result therefrom and (B) immediately after giving effect to the issuance, incurrence or assumption of such Indebtedness, the Senior Secured Leverage Ratio on a Pro Forma Basis shall not be greater than 4.25 to 1.00 and (ii) Permitted Refinancing Indebtedness in respect thereof;
(s) Indebtedness of Subsidiaries that are not Loan Parties in an aggregate amount not to exceed at any time outstanding the greater of $330 million and 3.0% of Consolidated Total Assets;
(t) unsecured Indebtedness in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements such goods and services; provided, that such obligations are incurred in connection with open accounts extended by suppliers on customary trade terms (which require that all such payments be made within 60 days after the incurrence of the related obligations) in the ordinary course of businessbusiness and not in connection with the borrowing of money or any Swap Agreements;
(mu) Indebtedness representing deferred compensation to employees and directors of the Borrower or any Subsidiary incurred (i) in the ordinary course of business or (ii) in connection with the Transactions (including as a result of the cancellation or vesting of outstanding options and other equity-based awards in connection therewith);
(v) Indebtedness in connection with Permitted Securitization Financings;
(w) Indebtedness of the Borrower and/or and the Subsidiaries incurred under overdraft, lines of credit or cash management facilities (including, but not limited to, intraday, ACH and purchasing card/T&E services) extended by one or more financial institutions reasonably acceptable to the Administrative Agent or one or more of the Lenders and (in each case) established for the Borrower’s and the Subsidiaries’ ordinary course of operations (such Indebtedness, the “Cash Management Line”), which Indebtedness may be secured as, but only to the extent, provided in Section 6.02(b) and in the Security Documents;
(x) Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures not in excess, at any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed one time outstanding, of the greater of $52,850,000 and 35550.0 million or 5.0% of Consolidated Adjusted EBITDA Total Assets as of the last day end of the most recently ended Test Periodfiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04;
(ny) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pz) Indebtedness refinancingconsisting of obligations of the Borrower or any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(aa) Indebtedness incurred in connection with notes and earn-out obligations payable to sellers in joint ventures and Permitted Business Acquisitions; provided that required payments in respect thereof shall not exceed $50.0 million in 2007, refunding $75.0 million in either 2008 or replacing any Indebtedness permitted under clauses (a)2009, (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), and 40% of the amount of Permitted Business Acquisitions in each subsequent year;
(bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
of Arbitrage Programs in an aggregate principal amount not to exceed the sum of (i) $10.0 million and (ii) the principal aggregate amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded or replaced, except by Permitted Investments related thereto from time to time;
(Acc) an amount equal to unpaid accrued interest, penalties and all premiums (including tender premiums) thereon plus underwriting discounts, other reasonable and customary if any), defeasance costs, interest (including post-petition interest), fees, commissions expenses, charges and expenses additional or contingent interest on obligations described in paragraphs (including upfront fees, original issue discount or initial yield paymentsa) incurred in connection with through (bb) above; and
(dd) Indebtedness of the relevant refinancing, refunding or replacement and Borrower existing on the related refinancing transaction, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts permitted to be incurred Closing Date pursuant to the Existing Senior Notes and any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness. For purposes of determining compliance with this Section 6.01 (provided, that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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 secured6.01, the Lien securing such amount of any Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has incurred (Ain respect of term Indebtedness) a final maturity equal or committed (in respect of revolving Indebtedness) on or prior to or later than (the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Closing Date, does not require mandatory commitment reductions, on the date that such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided that if any, prior to) the earlier of such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (x) the Latest Maturity Date and (y) the final maturity of or in a different currency from the Indebtedness being refinanced), refunded or replaced and (B) other than with respect such refinancing would cause the applicable Dollar-denominated restriction to revolving Indebtednessbe exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Refinancing Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness has does not exceed (xi) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original or committed principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders oramount, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount refinanced plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if the aggregate amount of fees, underwriting discounts, premiums (including tender premiums), defeasance costs and other costs and expenses incurred in connection with such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofrefinancing.
Appears in 1 contract
Sources: Credit Agreement (NRT Settlement Services of Missouri LLC)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness in respect thereof (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness in respect of self-insurance and Indebtedness and other obligations owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry norm;
(e) Indebtedness of the Borrower and/or to any Subsidiary (i) and of any Subsidiary to the Borrower or any other Subsidiary; provided, that Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to tendersthis Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit J hereto or on substantially identical subordination terms or other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry norm, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry norm;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in each case incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash other cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness services incurred in the ordinary course of business or consistent with past practice or industry norm; 158
(h) (i) (a) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and (b) Indebtedness otherwise incurred (but not assumed or acquired) by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition or merger, consolidation or amalgamation), where such acquisition, merger, consolidation or amalgamation is not prohibited by this Agreement; provided, that (A)(w) in the case of any such Indebtedness described in preceding clause (a), such Indebtedness was not incurred in contemplation of such acquisition, merger, consolidation or amalgamation, (x) in the case of any such Indebtedness secured by Liens on the Collateral that are Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation or amalgamation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than 3.00 to 1.00, (y) in the case of any such Indebtedness secured by Liens on the Collateral that are Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation or amalgamation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than 4.00 to 1.00 and (z) in the case of any other such Indebtedness, either (1) the Interest Coverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation or amalgamation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not less than 2.00 to 1.00 or (2) the Net Total Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation or amalgamation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than 4.00 to 1.00 and (B) in the case of any such Indebtedness described in preceding clause (b), (x) the final stated maturity date of such Indebtedness shall be no earlier than the Latest Maturity Date of any Class of Term Loans, (y) the Weighted Average Life to Maturity of such Indebtedness shall be no shorter than the remaining Weighted Average Life to Maturity of any Class of then outstanding Term Loans and (z) the MFN Provision shall apply to such Indebtedness to the same extent as applicable to the Subject Term Loans described therein and (ii) any Permitted Refinancing Indebtedness in respect of obligations the foregoing; provided that the aggregate outstanding principal amount of Indebtedness described in preceding clause (b) (together with Permitted Refinancing Indebtedness in respect thereof) incurred by a Subsidiary other than a Subsidiary Guarantor shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(q), Section 6.01(r) and Section 6.01(s) incurred by Subsidiaries other than the Subsidiary Guarantors, the greater of $133,000,000 and 0.25 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period;
(i) (i) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 365 days after the acquisition, lease, construction, installation, repair, replacement or improvement of the respective property (real or personal), equipment or other assets (whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, installation, repair, replacement or improvement, in an aggregate principal amount outstanding that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(i), would not exceed the greater of $266,500,000 and 0.50 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, (ii) Indebtedness (including Capitalized Lease Obligations) incurred by the Borrower or any Subsidiary to finance (whether prior to or within 365 days after) the acquisition, lease, construction, installation, repair, replacement or improvement of property (real or personal), equipment or related assets used or useful in the business of the Borrower and/or and its Subsidiaries and (iii) any Permitted Refinancing Indebtedness in respect of the foregoing; 159
(j) (i) Capitalized Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease- Back Transaction that is permitted under Section 6.03 and (ii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount outstanding that, immediately after giving effect to pay the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $266,500,000 and 0.50 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of the Borrower or any Subsidiary in an aggregate outstanding principal amount not greater than 100% of the amount of net cash proceeds received by the Borrower after the Closing Date from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the Borrower or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions or Permitted Cure Securities or otherwise result in an increase to the Cumulative Credit or the baskets described in Sections 6.04(q) and 6.09(b)(i)(C) and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(m) Guarantees (i) by the Borrower or any Subsidiary Guarantor of any Indebtedness of the Borrower or any Subsidiary Guarantor permitted to be incurred under this Agreement, (ii) by the Borrower or any Subsidiary Guarantor of Indebtedness otherwise permitted hereunder of any Subsidiary that is not the Borrower or a Subsidiary Guarantor to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Guarantor of Indebtedness of another Subsidiary that is not a Subsidiary Guarantor and (iv) by the Borrower or any Subsidiary Guarantor of Indebtedness of Subsidiaries that are not Subsidiary Guarantors incurred for working capital purposes in the ordinary course of business or consistent with past practice or industry norm on ordinary business terms, so long as such Indebtedness is permitted to be incurred under Section 6.01 to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Guarantor under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated to such other Indebtedness; 160
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price, deferred purchase price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the Transactions, any Permitted Business Acquisition, any New Projects, other Investments or the acquisition or disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in the ordinary course respect of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such SubsidiaryIndebtedness); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or or consistent with past practice or industry norm;
(iiip) obligations to reacquire assets Guarantees by the Borrower or inventory in connection with any Subsidiary of Indebtedness under customer financing arrangements lines of credit entered into in the ordinary course of businessbusiness or consistent with past practice or industry norm;
(mq) (i) Indebtedness secured by ▇▇▇▇▇ on the Collateral that are Other First Liens, so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 3.00 to 1.00; provided, that (x) the final stated maturity date of such Indebtedness shall be no earlier than the Latest Maturity Date of any Class of Term Loans, (y) the Weighted Average Life to Maturity of such Indebtedness shall be no shorter than the remaining Weighted Average Life to Maturity of any Class of then outstanding Term Loans and (z) the MFN Provision shall apply to such Indebtedness to the same extent as applicable to the Subject Term Loans described therein and (ii) any Permitted Refinancing Indebtedness in respect of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an foregoing; provided, further, that the aggregate outstanding principal amount of Indebtedness incurred pursuant to this clause (q) (including Permitted Refinancing Indebtedness) incurred by a Subsidiary other than a Subsidiary Guarantor shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to exceed the proviso in Section 6.01(h) and Sections 6.01(r) and (s) incurred by Subsidiaries other than the Subsidiary Guarantors, the greater of $52,850,000 133,000,000 and 35% of Consolidated 0.25 times the Adjusted EBITDA as of calculated on a Pro Forma Basis for the last day of the then most recently ended Test Period;
(nr) (i) Indebtedness secured by Li▇▇▇ ▇n the Collateral that are Junior Liens, so long as immediately after giving effect to the incurrence of any Person that becomes such Indebtedness and the use of proceeds thereof, the Net Secured Leverage Ratio on a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DatePro Forma Basis is not greater than 4.00 to 1.00; provided, that (ix) the final stated maturity date of such Indebtedness shall be no earlier than the Latest Maturity Date of any Class of Term Loans, and (Ay) existed at the time such Person became a Subsidiary or the assets subject Weighted Average Life to Maturity of such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, shall be no shorter than the remaining Weighted Average Life to Maturity of any Class of then outstanding Term Loans and (ii) any Permitted Refinancing Indebtedness in respect of the foregoing; provided, further, that the aggregate outstanding principal amount of such Indebtedness does incurred pursuant to this clause (r) (including Permitted Refinancing Indebtedness) incurred by a Subsidiary other than a Subsidiary Guarantor shall not exceed exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to the proviso in Section 6.01(h) and Sections 6.01(q) and (s) incurred by Subsidiaries other than the Subsidiary Guarantors, the greater of $20,000,000 133,000,000 and 25% of Consolidated 0.25 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; 161
(i) unsecured Indebtedness, so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, either (1) the Interest Coverage Ratio on a Pro Forma Basis is not less than 2.00 to 1.00 or (2) the Net Total Leverage Ratio on a Pro Forma Basis is not greater than 4.00 to 1.00; provided, that (x) the final stated maturity date of such Indebtedness shall be no earlier than the Latest Maturity Date of any Class of Term Loans, and (y) the Weighted Average Life to Maturity of such Indebtedness shall be no shorter than the remaining Weighted Average Life to Maturity of any Class of then outstanding Term Loans and (ii) any Permitted Refinancing Indebtedness in respect of the last day foregoing; provided, further, that the aggregate outstanding principal amount of Indebtedness incurred pursuant to this clause (s) (including Permitted Refinancing Indebtedness) incurred by a Subsidiary other than a Subsidiary Guarantor shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to the proviso in Section 6.01(h) and Sections 6.01(q) and (r) incurred by Subsidiaries other than the Subsidiary Guarantors, the greater of $133,000,000 and 0.25 times the Adjusted EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period;
(oi) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (Subsidiaries that are not Loan Parties in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the an aggregate principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinancedoutstanding that, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without immediately after giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect theretothe use of proceeds thereof, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu together with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not to exceed in exceed, when taken together with the aggregate (a) principal amount of any other Indebtedness outstanding pursuant to Section 6.01(bb), the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto greater of $160,000,000 and 0.30 times the Adjusted EBITDA calculated on a Pro Forma Basis as of for the last day of the then most recently ended Test Period, including the application of the proceeds thereof and (ii) any Permitted Refinancing Indebtedness in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization respect thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):;
(i) if such Indebtedness is secured by a Lien on incurred in the Collateral that is pari passu ordinary course of business or consistent with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 past practice or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists industry norm in respect of Indebtedness for borrowed money or Indebtedness obligations of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofthe
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Sources: Credit Agreement (Dave & Buster's Entertainment, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness in respect thereof (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes, Commercial Agreements entered into in the ordinary course of business and for non-speculative purposes and Supply Chain Financings;
(i) Indebtedness constituting reimbursement obligations with respect to letters of credit, bankers acceptances and bank guarantees or similar credit transactions issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims, health, disability or other benefits to employees or former employees or their families or property, casualty or liability insurance or self-insurance, and letters of credit in connection with the maintenance of, or pursuant to the requirements of, environmental or other permits or licenses from governmental authorities, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims and (ii) obligations in respect of self-insurance and obligations (including reimbursement obligations with respect to letters of credit, bank guarantees, warehouse receipts and similar instruments) in respect of performance, bid, appeal and surety bonds, performance and completion guarantees and similar obligations provided by the Borrower or any Subsidiary in the ordinary course of business or consistent with past practice or industry norm, or issued to any Governmental Authority as required by such agreementGovernmental Authority;
(e) Indebtedness of the Borrower and/or to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided, that (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return except in respect of money bonds or other similar obligations intercompany current liabilities incurred in the ordinary course of business in connection with the cash management, cash pooling, tax and accounting operations of the Borrower and its Subsidiaries) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit I hereto or on substantially identical subordination terms or other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees, trade contracts, tender, stay, statutory, judgment, appeal, advance payment, indemnities, supply chain financing transactions, export or import transactions, customs, sales, value added or similar taxes, revenue bonds and similar obligations, in each case provided in the ordinary course of business or consistent with past practice or industry norm, including those incurred to secure health, safety and environmental obligations in the ordinary course of business or consistent with past practice or industry norm or issued to any Governmental Authority as required by such Governmental Authority;
(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, or other cash management services;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person amalgamated, merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred, issued or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition or merger, consolidation or amalgamation) or other Investments or New Projects, where such acquisition, merger, consolidation, amalgamation, Investment or New Project is not prohibited by this Agreement; provided, that the aggregate outstanding principal amount of such Indebtedness incurred or issued pursuant to this clause (h)(i) does not to exceed the sum of (A) the greater of $242,000,000 and 1.00 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period as of the date of the incurrence of such Indebtedness or the establishment of commitments in respect thereof, plus (B) an additional amount so long as, if incurred or issued pursuant to this clause (B), (x) in the case of any such Indebtedness secured by Liens on the Collateral that are Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation, amalgamation, Investment or New Project, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 1.75 to 1.00 or (II) no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, (y) in the case of any such Indebtedness secured by Liens on the Collateral that are Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation, amalgamation, Investment or New Project, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 3.00 to 1.00 or (II) no greater than the Net Secured Leverage Ratio in effect immediately prior thereto and (z) in the case of any other such Indebtedness, either (I) the Interest Coverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation, amalgamation, Investment or New Project, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (A) not less than 2.00 to 1.00 or (B) no less than the Interest Coverage Ratio in effect immediately prior thereto or (II) the Net Total Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger, consolidation, amalgamation, Investment or New Project, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (A) not greater than 3.50 to 1.00 or (B) no greater than the Net Total Leverage Ratio in effect immediately prior thereto and (ii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) (i) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 365 days after the acquisition, lease, construction, installation, maintenance, service, repair, replacement, remodeling, modernization, expansion, upgrade, development, update or improvement of the respective property (real or personal), equipment or other asset (whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, installation, maintenance, services, repair, replacement, remodeling, modernization, upgrade, development, expansion, update or improvement, in an aggregate principal amount outstanding that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(i), would not exceed the greater of $121,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, (ii) Indebtedness (including Capitalized Lease Obligations) incurred by the Borrower or any Subsidiary to finance (whether prior to or within 365 days after) the acquisition, lease, construction, installation, maintenance, service, repair, replacement, remodeling, modernization, expansion, upgrade, development, update or improvement of property (real or personal), equipment or other assets (whether through the direct purchase of property or the Equity Interest of any person owning such property) used or useful in the business of the Borrower and its Subsidiaries and (iii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(j) (i) Capitalized Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 6.03 and (ii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $181,500,000 and 0.75 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided that the aggregate outstanding principal amount of Indebtedness incurred utilizing this clause (k)(i) shall reduce the availability under clause (i)(a)(y) of the definition of “Incremental Amount” for so long as such Indebtedness remains outstanding, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of the Borrower or any Subsidiary in an aggregate outstanding principal amount not greater than 100% of the amount of net cash proceeds received by the Borrower after the Closing Date (x) from the issuance or sale of its Qualified Equity Interests, (y) from a contribution to its common equity or (z) that becomes part of the capital of the Borrower through consolidation, amalgamation or merger achieved through the issuance of, or in exchange for, Equity Interests of the Borrower or any Parent Entity (in each case of (x), (y) and (z), other than proceeds from the sale of Equity Interests to, or contributions from, the Borrower or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions or Permitted Cure Securities and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(m) Guarantees by the Borrower or any Subsidiary of any Indebtedness of the Borrower or any Subsidiary permitted to be incurred under this Agreement; provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated to such other Indebtedness;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price, deferred purchase price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the Transactions, the Borrower IPO, any Permitted Business Acquisition, any New Projects, other Investments or the acquisition or disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(o) Indebtedness in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds warehouse receipts or similar instruments issued to support any performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness), in each case, in the foregoing itemsordinary course of business or consistent with past practice or industry norm;
(fp) Guarantees by the Borrower or any Subsidiary of Indebtedness under customer financing lines of credit entered into in the ordinary course of business or consistent with past practice or industry norm;
(q) (i) Indebtedness secured by ▇▇▇▇▇ on the Collateral that are Other First Liens so long as immediately after giving effect to the incurrence of such Indebtedness and the Borrower and/or use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 1.75 to 1.00; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (q)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(q)(i), Section 6.01(r)(i), Section 6.01(s)(i) and Section 6.01(z)(i) that is, in each case, incurred by Subsidiaries other than Subsidiary Loan Parties, the greater of $121,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any Indebtedness pursuant to this clause (q)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(r) (i) Indebtedness secured by Liens on the Collateral that are Junior Liens so long as immediately after giving effect to the incurrence of Banking Services and/or otherwise such Indebtedness and the use of proceeds thereof, the Net Secured Leverage Ratio on a Pro Forma Basis is not greater than 3.00 to 1.00; provided that the (x) aggregate principal amount of Indebtedness outstanding under this clause (r)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(r)(i), Section 6.01(q)(i), Section 6.01(s)(i) and Section 6.01(z)(i) that is, in connection with Cash management each case, incurred by Subsidiaries other than Subsidiary Loan Parties, the greater of $121,000,000 and Deposit Accounts, including incentive, supplier finance or similar programs0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any Indebtedness pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) guaranties Indebtedness so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, either (x) the Interest Coverage Ratio on a Pro Forma Basis is not less than 2.00 to 1.00 or (y) the Net Total Leverage Ratio on a Pro Forma Basis is not greater than 3.50 to 1.00; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (s)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the Borrower and/or aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(s)(i), Section 6.01(q)(i), Section 6.01(r)(i) and Section 6.01(z)(i) that is, in each case, incurred by Subsidiaries other than Subsidiary Loan Parties, the greater of $121,000,000 and 0.50 times the obligations EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of suppliers, distributors, resellers, customers, licensees any Indebtedness pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01 and sublicensees in the ordinary course of business, (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $121,000,000 and 0.50 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness incurred in the ordinary course of business or consistent with past practice or industry norm in respect of obligations of the Borrower and/or or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofsuc
Appears in 1 contract
Sources: Revolving Credit Agreement (Phoenix Education Partners, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit No Loan Party or Subsidiary of any of its Subsidiaries to, directly or indirectly, Loan Party will create, incur, assume or suffer to exist or otherwise become or remain be liable with in respect to of any Indebtedness, exceptother than, without duplication, the following:
(a) Indebtedness in respect of the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Letters of Credit;
(b) Indebtedness Contingent Liabilities of the Borrower CatchMark Timber with respect to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Unrestricted Timber Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower pursuant to any Subsidiary must be unsecured Unrestricted Timber Transaction, solely in the form of a limited recourse guarantee of CatchMark Timber and expressly subordinated to the Obligations of the Borrower on terms that are acceptable in form and substance satisfactory to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Agent;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant respect to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 Secured Bank Product entered into in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or any other cash management or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities arrangements entered into in the ordinary course of business;
(hd) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise Rate Protection Agreements permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.067.2.21;
(ie) Unsecured, subordinated Indebtedness of among the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01Loan Parties;
(jf) Surety Bond Indebtedness;
(k) Indebtedness Contingent Liabilities of the Borrower and/or any Loan Party or Subsidiary consisting of any Loan Party arising with respect to customary indemnification obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into incurred in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) Contingent Liabilities in the financing form of insurance premiumsLetters of Credit made by or for the account of any Loan Party or any Shell Subsidiary (including any Permitted JV Investment Subsidiary) as Credit Support in connection with any letter of intent or purchase agreement arising in connection with a transaction which, if consummated, would be permitted by Section 7.2.5(a)(vii) so long as such Credit Support does not exceed in the aggregate the Permitted Escrow Amount with respect to such transaction, and (ii) take-or-pay Contingent Liabilities of (1) any Permitted JV Investment Subsidiary with regard to the obligations contained in supply arrangementsof a Permitted Joint Venture or Shell Subsidiary, in each case, in the ordinary course which is a subsidiary of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any such Permitted JV Investment Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B2) was not created CatchMark Timber with regard to the obligations of a Permitted JV Investment Subsidiary, Shell Subsidiary, or incurred a Permitted Joint Venture, in anticipation thereof, and (ii) the aggregate outstanding principal amount each case of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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), pursuant to any letter of intent or purchase agreement (or mandate or commitment letter regarding the financing thereof) arising in connection with a transaction which, if consummated, would be permitted by Section 7.2.5(a)(vii); provided that, (x) such additional Indebtedness is secured, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) other than Contingent Liabilities will be unsecured or will be secured solely by Credit Support that does not exceed in the case of Refinancing Indebtedness aggregate the Permitted Escrow Amount with respect to clauses (i), (j), (m), (n), (u), (x), such transaction and (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans)unless otherwise agreed by the Administrative Agent in its sole discretion, such Indebtedness has (A) a final maturity equal Contingent Liabilities will terminate with respect to or CatchMark Timber no later than the consummation of such transaction;
(andh) Contingent Liabilities of any Loan Party, in the case of revolving IndebtednessShell Subsidiary, does not require mandatory commitment reductions, if any, prior to) the earlier of or Permitted JV Investment Subsidiary arising pursuant to (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms Organizational Documents of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofPermitted
Appears in 1 contract
Sources: Fifth Agreement Regarding Consents and Amendments (CatchMark Timber Trust, Inc.)
Indebtedness. The Borrower shall notCreate, nor shall it permit any of its Subsidiaries to, directly or indirectly, createissue, incur, assume assume, become liable in respect of or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) the Secured Obligations (including Indebtedness of any Additional Term Loans and Loan Party pursuant to any Additional Opco Revolving Facility Repayment Term Loans)Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness MVWC or of the Borrower to any Subsidiary must be unsecured and expressly subordinated of any Wholly Owned Subsidiary Guarantor to MVWC or to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)or any other Subsidiary;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 Guarantee Obligations incurred in the ordinary course of business by MVWC or the Borrower or any of their respective Subsidiaries of obligations of any Wholly Owned Subsidiary Guarantor;
(d) Indebtedness outstanding on the Effective Date and listed on Schedule 7.3(d) and any refinancings, refundings, renewals or extensions thereof (iiwithout increasing, or shortening the maturity of, the principal amount thereof);
(e) Indebtedness (including, without limitation, Capital Lease Obligations) secured by Liens permitted by Section 7.4(g) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments an aggregate principal amount not to support exceed $12,000,000 at any of the foregoing itemsone time outstanding;
(f) Indebtedness of the Borrower and/or arising under any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programsSwap Agreements permitted by Section 7.12;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iiig) Indebtedness in respect of letters of creditof, bankers’ acceptancesrepresented by, bank guaranties or in connection with appeal, bid, performance, surety, customs or similar instruments supporting trade payablesbonds issued for the account of any Group Member, warehouse receipts the performance of bids, tenders, sales or contracts (in each case, other than for the repayment of borrowed money), statutory obligations, workers’ compensation claims, unemployment insurance, other types of social security or pension benefits, self-insurance and similar facilities entered into obligations and arrangements, in each case, to the extent incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrowerincurred under, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint ventureObligations relating to, the related Investment is permitted under Section 6.06Receivables Warehouse Facility;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) takeNon-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness Recourse Debt of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred Time Share SPV in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii)Qualified Securitization Transactions;
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Credit Agreement (MARRIOTT VACATIONS WORLDWIDE Corp)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become or remain liable with suffer to exist any Indebtedness (exclusive of trade debt) except in respect to any Indebtedness, except:
of (a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
Obligations; (b) Indebtedness Capitalized Lease Obligations consisting of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness Capital Lease of the Borrower wet sand plant located in ▇▇▇▇▇▇ County, Wisconsin plus additional Capitalized Lease Obligations in an aggregate amount at any time outstanding not to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
exceed $25,000,000; (c) [reserved];
Permitted Purchase Money Indebtedness; (d) Indebtedness arising from under any agreement providing for indemnification, adjustment of purchase price or similar obligations Hedge so long as such Indebtedness (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior except to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
extent constituting Hedge Liabilities) is unsecured; (e) Indebtedness of the Borrower and/or owing to any other Credit Party or Restricted Subsidiary (i) thereof so long as any such Indebtedness owing to any Person that is not a Credit Party is subordinated pursuant to tendersan agreement reasonably satisfactory to Agent; (f) guarantees permitted under Section 7.3; (g) to the extent not otherwise described in this Section 7.6, statutory Indebtedness set forth on Schedule 7.6 and any Permitted Refinancing in respect thereof; (h) Indebtedness in respect of workers’ compensation claims, property casualty or liability insurance, and self-insurance obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
business; (i) guaranties Indebtedness arising from the honoring by the Borrower and/or any Subsidiary a bank or other financial institution of the obligations of suppliersa check, distributors, resellers, customers, licensees and sublicensees draft or similar instrument drawn against insufficient funds in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(ij) Indebtedness of the Borrower and/or Parent Guarantor or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (iik) take-or-pay obligations contained in supply arrangementsIndebtedness arising from agreements of the Parent Guarantor or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with a Disposition permitted under Section 7.1(b) or a Permitted Acquisition, (l) Indebtedness of the Parent Guarantor or any Restricted Subsidiary in connection with 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 Guarantor or a Restricted Subsidiary in the ordinary course of business and/or (iii) or pursuant to self-insurance obligations to reacquire assets or inventory and in each case not in connection with customer financing arrangements in the ordinary course borrowing of business;
money or the obtaining of advances, (m) Indebtedness in the form of subordinated notes, so long as immediately before and after giving effect to the incurrence of any such Indebtedness, and the application of the Borrower and/or any Subsidiary use of proceeds therefrom: (i) no Event of Default shall have occurred or be continuing or shall be caused thereby; (ii) after giving effect to the incurrence of such Indebtedness and the use of proceeds therefrom, Parent Guarantor and its Restricted Subsidiaries shall be in compliance on a Pro Forma Basis with respect to Capital Leases and purchase money Indebtedness the covenants then in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA effect set forth in Section 6.5 as of the last day of the fiscal quarter most recently ended Test Period;
on or prior to the date of such incurrence of Indebtedness for which financial statements have been provided to Agent pursuant to Section 9.7 or 9.8(a) (nas applicable); and (iii) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to interest on such Indebtedness were acquired and (B) was may not created or incurred be paid in anticipation thereof, and (ii) cash prior to the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transactionMaturity Date, (B) an amount equal such Indebtedness shall not mature and shall not provide for any mandatory prepayments, offers to any existing commitments unutilized thereunder repurchase or redemptions (other than customary asset sale and change of control offers) until at least six months after the Maturity Date, and such Indebtedness shall be subordinated in right of payment to the Obligations purusant to a subordination agreement satisfactory to the Agent, (C) additional amounts such Indebtedness shall be unsecured and shall not be guaranteed by any person other than a Credit Party, (D) the aggregate amount of Indebtedness permitted to be incurred pursuant to under this Section 6.01 7.6(m) by Restricted Subsidiaries that are not Credit Parties shall not exceed $10,000,000 at any time outstanding, (providedE) the covenants, that mandatory prepayments, events of default and guarantees of such Indebtedness, taken as a whole, shall not be materially more restrictive to the Credit Parties than the terms of this Agreement, as determined by the Borrowing Agent in good faith, unless (1) any additional Indebtedness referenced in such provisions are added to this clause (C) satisfies Agreement for the other applicable requirements of this definition (with additional amounts incurred in reliance on this clause (C) constituting a utilization benefit of the relevant basket Lenders hereunder or exception pursuant to which such additional amount is permitted) and (2) if any such additional Indebtedness is secured, provisions apply after the Lien securing such Indebtedness satisfies Maturity Date and (F) the applicable Borrowing Agent shall have furnished to the Agent a certificate from an Authorized Officer certifying as to compliance with the requirements of Section 6.02),
(ii) other than in the case of Refinancing Indebtedness with respect to preceding clauses (i), (jii) and (iii) and containing the calculations required by the preceding clause (ii), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of ; provided that (x) the Latest Maturity Date Maximum Revolving Advance Amount shall be reduced by an amount equal to the net proceeds of such notes and if as a result of such reduction the Revolving Facility Usage exceeds the Line Cap, the Credit Parties shall promptly comply with Section 2.6 and (y) no more than $10,000,000 of Indebtedness incurred pursuant to this clause (m) may be secured by a Lien, (n) the final maturity of Specified Note, including interest payments thereon by the Indebtedness being refinanced, refunded or replaced and (B) other than increase in the principal amount hereof in accordance with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount Specified Note and (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (ao) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Second Lien Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 1 contract
Sources: Revolving Credit and Security Agreement (Emerge Energy Services LP)
Indebtedness. The Borrower shall notNo Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain liable with respect to any Indebtedness (each of the following, “Permitted Indebtedness”), except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Obligations;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any (i) Indebtedness of any Guarantor Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower Company or to any other Guarantor Subsidiary must be unsecured and expressly subordinated or of Company to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)any Guarantor Subsidiary;
(c) [reserved];
(d) Indebtedness incurred by Company or any of its Subsidiaries arising from any agreement agreements providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date from guaranties or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, bonds or performance bonds or similar instruments securing the performance of the Borrower Company or any such Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions or permitted dispositions of any such agreementbusiness or assets of Company or any of its Subsidiaries;
(ed) Indebtedness of the Borrower and/or any Subsidiary (i) which may be deemed to exist pursuant to tendersany guaranties, statutory obligations, bids, leases, governmental contracts, trade contractsperformance, surety, staystatutory, customs, appeal, performance and/or return of money bonds appeal or other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(he) Guarantees by the Borrower and/or any Subsidiary Indebtedness in respect of Indebtedness or other obligations of the Borrowernetting services, any Subsidiary and/or any joint venture overdraft protections and otherwise in connection with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement deposit accounts;
(and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that f) guaranties in the case ordinary course of any Guarantee by the Borrower business of the obligations of suppliers, customers, franchisees and licensees of Company and its Subsidiaries;
(g) Indebtedness described in Schedule 6.1 and renewals and extensions thereof expressly provided for in the agreements evidencing any Subsidiary such Indebtedness as the same are in effect on the date of this Agreement, and Permitted Refinancing Indebtedness used to refinance amounts owed thereunder;
(h) Indebtedness outstanding under the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Bridge Facility Documents and Permitted Refinancing Indebtedness used to refinance amounts owed thereunder;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or Company pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01Hedge Agreements;
(j) Surety Bond IndebtednessIndebtedness of Company evidenced by Other Hedge Agreements entered into pursuant to Section 6.6(m);
(k) Indebtedness owed to (including obligations in respect of letters of credit for the Borrower and/or benefit of) any person providing worker’s compensation, health, disability or other employee benefits or property, casualty or liability insurance to Company or any Subsidiary consisting of Company, pursuant to reimbursement or indemnification obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businessto such person;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting Company or its Subsidiaries in respect of (i) the financing performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations and trade-related letters of insurance premiums, (ii) take-or-pay obligations contained in supply arrangementscredit, in each casecase provided in the ordinary course of business, including those incurred to secure health, safety and environmental obligations in the ordinary course of business and/or and any extension, renewal or refinancing thereof to the extent that the amount of refinancing Indebtedness is not greater than the amount of Indebtedness being refinanced;
(iiim) obligations to reacquire assets Indebtedness arising from the honoring by a bank or inventory in connection with customer financing arrangements other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business;
(m) , provided that such Indebtedness is extinguished within two Business Days of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Periodits incurrence;
(n) Indebtedness with respect to Capital Leases, mortgage financings and purchase money Indebtedness incurred by Company or any Subsidiary of Company prior to or within 270 days after the acquisition or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement (including any Person that becomes a Subsidiary or Indebtedness assumed acquired in connection with any acquisition or similar Investment permitted hereunder after the Closing Datea Permitted Business Acquisition); provided, that any such Indebtedness (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or shall be secured only by the assets subject to acquired or improved in connection with the incurrence of such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofIndebtedness, and (ii) shall constitute not less than 75% of the aggregate outstanding consideration paid with respect to such asset, and extensions, renewals and refinancings thereof, in an aggregate principal amount which, when aggregated with the principal amount of such all other Indebtedness does not exceed the greater of $20,000,000 then outstanding and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary incurred pursuant to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), this clause (n), (q)is not in excess of $25,000,000 outstanding at any time, (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in provided that any case, including any such refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
shall not be (i) the principal amount Indebtedness of such Indebtedness does an obligor that was not exceed the principal amount of the Indebtedness being refinanced, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness obligor with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being extended, renewed or refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(ivii) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the a principal amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing which exceeds the Indebtedness being refinancedrenewed, refunded extended or replaced, taken as a whole refinanced or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00additionally secured;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Credit and Guaranty Agreement (Houghton Mifflin Co)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) Indebtedness under the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Loan Documents;
(b) Indebtedness of outstanding on the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other SubsidiaryNinth Amendment Effective Date set forth on Schedule 7.03;
(c) intercompany Indebtedness permitted under Section 7.02; provided, provided that in the case of any Indebtedness of any owing by a Loan Party to a Restricted Subsidiary owing to the Borrower, that is not a Loan Party such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly be subordinated prior to the Obligations of the Borrower on terms that are in a manner and to an extent reasonably acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved]Agent;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligationsor otherwise) incurred in connection with existing or arising under any Disposition permitted hereunderSwap Contract, any acquisition permitted hereunder provided that such obligations are (or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any were) entered into by such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees Person in the ordinary course of business, and not for purposes of speculation;
(iie) purchase money Indebtedness incurred in the ordinary course of business (including obligations in respect of obligations capital leases and Synthetic Lease Obligations) incurred to finance all or any part of the Borrower and/or any Subsidiary to pay the deferred purchase price or cost of goods design, construction, installation or services improvement of property, plant or progress payments equipment used in connection with the business of the Loan Parties or any of the Restricted Subsidiaries and renewals, refinancings and extensions thereof, provided that the aggregate outstanding principal amount of all such goods and services Indebtedness shall not exceed the greater of (x) $100,000,000 and (iiiy) Indebtedness 5% of Consolidated Net Tangible Assets as of such date of incurrence;
(f) the Senior Notes;
(g) to the extent constituting Indebtedness, obligations in respect of letters Cash Management Agreements;
(h) to the extent constituting Indebtedness, obligations in respect of creditworkers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance, self-insurance obligations, bankers’ acceptances, bank guaranties or performance, bid, surety, appeal, reclamation, remediation and similar instruments supporting trade payables, warehouse receipts or similar facilities entered into bonds and completion guarantees (not for borrowed money) provided in the ordinary course of business;
(hi) Guarantees to the extent constituting Indebtedness, obligations arising from the honoring by the Borrower and/or any Subsidiary of Indebtedness a bank or other obligations financial institution of the Borrowera check, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower draft or such Subsidiarysimilar instrument inadvertently drawn against insufficient funds, so long as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01is covered within five (5) Business Days;
(j) Surety Bond IndebtednessIndebtedness of any Person incurred and outstanding on or prior to the date on which such Person became a Restricted Subsidiary or was acquired by, or merged into or arranged or consolidated with, the Borrower or any of its Restricted Subsidiaries (other than Indebtedness incurred in contemplation of, or in connection with, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary of or was otherwise acquired by the Borrower); provided that (i) neither the Borrower nor any Restricted Subsidiary (other than such Person and its Restricted Subsidiaries or any other Person that such Person merges with or that acquires the assets of such Person) shall have any liability or other obligation with respect to such Indebtedness (except, for the avoidance of doubt, as separately permitted under another clause of this Section 7.03 (other than clause (o))) and (ii) either (A) the Consolidated Net Leverage Ratio, determined on a Pro Forma Basis for such incurrence of Indebtedness and acquisition, merger or consolidation does not exceed 3.00 to 1.0 at the time of incurrence thereof or (B) the aggregate principal amount of all such Indebtedness does not exceed $25,000,000;
(k) Indebtedness of to the Borrower and/or any Subsidiary extent constituting Indebtedness, obligations consisting of unpaid insurance premiums owed to any Person providing property, casualty, liability or other insurance to any Loan Party or any other Restricted Subsidiary in any fiscal year, pursuant to reimbursement or indemnification obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in to such Person; provided that such Indebtedness is incurred only to defer the ordinary course cost of businesssuch unpaid insurance premiums for such fiscal year and is outstanding only during such fiscal year;
(l) Indebtedness of to the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiumsextent constituting Indebtedness, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessoutstanding under Deferred Revenue Financing Arrangements;
(m) other unsecured Indebtedness provided that (i) no Default shall exist or shall result therefrom, (ii) the Loan Parties are in compliance with the financial covenants set forth in Section 7.11 recomputed as of the end of the period of the four fiscal quarters most recently ended for which the Borrower has delivered financial statements pursuant to Section 6.01(a) or (b) after giving effect to the incurrence of such Indebtedness (and the use of proceeds thereof) on a Pro Forma Basis (and the Consolidated Net Leverage Ratio, as so calculated, shall not exceed 3.00 to 1.0) and (iii) not more than $150,000,000 in the aggregate of Indebtedness of the Borrower and/or Loan Parties incurred pursuant to this clause (m) and having a maturity sooner than the Maturity Date shall be outstanding at any Subsidiary with respect to Capital Leases and purchase money one time;
(n) Indebtedness of Restricted Subsidiaries that are not Guarantors in an aggregate outstanding principal amount not to exceed the greater of (i) $52,850,000 50,000,000 and 354.0% of Consolidated Adjusted EBITDA Net Tangible Assets as of the last day such date of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Periodincurrence;
(o) Guarantees with respect to Indebtedness consisting of promissory notes issued by permitted under this Section 7.03; provided that, if the Borrower Indebtedness being Guaranteed is subordinated to or any Subsidiary pari passu with the Obligations, then the Guarantee must be subordinated or pari passu, as applicable to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance same extent as the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a)Indebtedness Guaranteed;
(p) Permitted Refinancing Indebtedness refinancingincurred in exchange for, refunding or replacing the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge any Indebtedness (other than intercompany Indebtedness) that was permitted by this Agreement to be incurred under clauses (aSection 7.03(b), (if), (j), (m) or (p); and
(q) additional Indebtedness in an aggregate principal amount (or accreted value, (n)as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (q), (r)not to exceed, (u), (w), (y), (z), (bb) and/or (ff) as of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the principal amount date 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, penalties 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 and the related refinancing transaction, (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 definition (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 securedincurrence, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier greater of (x) the Latest Maturity Date $25,000,000 and (y) the final maturity 2.5% of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced Consolidated Net Tangible Assets as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofincurrence.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit K hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower; Table of Contents
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and industry practices;
(iiig) Indebtedness in respect arising from the honoring by a bank or other financial institution of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(hi) Guarantees by Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower and/or or any Subsidiary of Indebtedness or other obligations of after the Borrower, any Subsidiary and/or any joint venture with respect to Closing Date and Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 or assumed by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary)Agreement; provided, that that, (w) in the case of any Guarantee such Indebtedness secured by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint ventureLiens on Collateral that are Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related Investment transactions is permitted under Section 6.06;
(iI) Indebtedness not greater than 4.25 to 1.00 or (II) no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, (x) in the case of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness secured by Liens on Collateral that are Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 5.25 to 1.00 or (II) no greater than the Net Secured Leverage Ratio in excess of $5,000,000 shall be described on Schedule 6.01;
effect immediately prior thereto, (jy) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course case of business;
any other such Indebtedness, the Interest Coverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions is (lI) Indebtedness of not less than 2.00 to 1.00 or (II) no less than the Borrower and/or any Subsidiary consisting of Interest Coverage Ratio in effect immediately prior thereto and (iz) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness case of any Person that becomes such Indebtedness incurred under this clause (h) by a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became other than a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofLoan Party, and (ii) the aggregate outstanding principal amount of such Indebtedness does immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions shall not exceed the greater of $20,000,000 75,000,000 and 25% of Consolidated Adjusted 0.40 times the EBITDA as of calculated on a Pro Forma Basis for the last day of the then most recently ended Test Period; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(oi) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness consisting of promissory notes issued incurred by the Borrower or any Subsidiary prior to any stockholder or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any Parent Company person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or any current or former directorimprovement, officerin an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, employee, member of management, manager or consultant together with the aggregate principal amount of any Parent Companyother Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed (A) the greater of $100,000,000 and 5.5% of Consolidated Total Assets as of the end of the then most recently ended Test Period plus (B) any additional amounts, so long as immediately after giving effect to the incurrence of such additional amounts under this clause (B) and the use of proceeds thereof, the Borrower or any Subsidiary Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 4.25 to 1.00 (or their respective Immediate Family Members) to finance the purchase or redemption assuming, for purposes of Capital Stock of any Parent Company permitted by Section 6.04(a);
this clause (p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (aB), (ithat all Capitalized Lease Obligations of the Borrower and the Subsidiaries incurred pursuant to this Section 6.01(i) outstanding at such time are included as Consolidated Debt in such calculation of the Net First Lien Leverage Ratio), (j), (m), (n), (q), (r), (u), (w), and (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; provided, that:
Table of Contents (j) (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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, Capitalized Lease Obligations and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance or any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of Subsidiary arising from any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith Sale and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral Lease-Back Transaction that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof and (ii) if such Indebtedness is secured Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending or other funds made available by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basisfood, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00beverage and packaging suppliers in connection with incentive arrangements;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: First Lien Credit Agreement (Hospitality Distribution Inc)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlywill not contract, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)other Credit Documents;
(b) Indebtedness obligations of the Borrower in respect of Hedging Agreements entered into in order to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured manage existing or anticipated interest rate or exchange rate risks and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)not for speculative purposes;
(c) [reserved];Indebtedness of the Borrower with respect to that certain letter of credit issued by Bank of America in the amount of $1,328,340 to secure the Borrower's obligations to construct the Housing Project and satisfy other conditions to qualification for additional square feet of floor area through the housing bonus (the "Housing Credits Letter of Credit").
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance obligation of the Borrower or any Subsidiary to pay (a) HRG $1,250,000 pursuant to the Joint Development Agreement on account of HRG's construction, development, ownership and operation of the Housing Project or (b) any other Person reasonably acceptable to the Project Administrative Agent up to $1,250,000 on account of such agreementPerson's construction, development, ownership and operation of the Housing Project;
(e) Indebtedness obligation of the Borrower and/or any Subsidiary to purchase the Tipp Property in the amount of up to $2,000,000 following (i) the exercise by the Ground Lessor (as defined in the Ground Lease Agreement) of its right to sell pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds the Ground Lease Agreement or other similar obligations incurred in the ordinary course of business and (ii) in respect the exercise by the Borrower of letters of credit, bank guaranties, surety bonds, performance bonds its right to purchase pursuant to the Ground Lease Agreement or similar instruments to support any of other arrangement under which the foregoing itemsBorrower may purchase the Tipp Property;
(f) Indebtedness obligation of the Borrower and/or to guarantee each third party lease on each retail space (at a triple net rent and on other market terms) located below the Housing Project for the life of the tax exempt bonds issued to finance the Housing Project, as required by (i) the Joint Development Agreement or (ii) any Subsidiary in respect other agreement entered into by the Borrower with a Person reasonably acceptable to the Project Administrative Agent regarding the construction, development, ownership and operation of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programsthe Housing Project;
(ig) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this to HRG under the Joint Development Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, Person reasonably acceptable to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Project Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofAgent
Appears in 1 contract
Sources: Credit Agreement (Nordstrom Inc)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is in excess of $2,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to tendersthe Loan Parties shall be subject to Section 6.04(b) and (ii) Indebtedness owed by any Loan Party to Holdings or any Subsidiary that is not a Loan Party shall be unsecured and subordinated to the Loan Obligations under this Agreement on subordination terms substantially in the form of Exhibit F hereto or on other subordination terms reasonably satisfactory to the Administrative Agent;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, ;
(iig) Indebtedness incurred 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 or other cash management services, in each case incurred the ordinary course of business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of all or substantially all of the assets of, or all or substantially all of the Equity Interests (other than directors’ qualifying shares) not previously held by the Borrower and its Subsidiaries in, or merger, consolidation or amalgamation with, a person or a division or line of business of a person or a controlling interest in a person (or any subsequent investment made in a person, division or line of business previously acquired in any such acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement; provided, that (x) in the case of Indebtedness secured by Liens on the Collateral that are pari passu with, or senior to, the Liens on the Collateral securing the Loan Obligations, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the assumption or incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the proceeds thereof) and any related transactions is (I) not greater than 3.50 to 1.00 or (II) no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, (y) in the case of Indebtedness secured by Liens on the Collateral that rank junior to the Liens on the Collateral securing the Term B Loans, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof (but without netting any of the proceeds thereof) and any related transactions is (I) not greater than 4.50 to 1.00 or (II) no greater than the Net Secured Leverage Ratio in effect immediately prior thereto and (z) in the case of unsecured Indebtedness, the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof (but without netting any of the proceeds thereof) and any related transactions is (I) not greater than 5.00 to 1.00 or (II) no greater than the Total Net Leverage Ratio in effect immediately prior thereto; provided, further, (A) that the incurrence of any Indebtedness for borrowed money pursuant to this clause (h)(i) (except for any seller note or other seller financing) shall be subject to the last paragraph of this Section 6.01, and (B) any such Indebtedness incurred by any Subsidiary that is not a Guarantor shall not exceed at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal amount of any other non-Guarantor Indebtedness outstanding pursuant to Section 6.01(l)(i), (r)(i) and (s)(i), the greater of $25,000,000 and 2.5% of Consolidated Total Assets; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (i) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate amount of any other Indebtedness outstanding pursuant to this Section 6.01(i), would not exceed the greater of $50,000,000 and 4.5% of Consolidated Total Assets, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations incurred by the Borrower or any Subsidiary in respect of obligations any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) other Indebtedness of the Borrower and/or or any Subsidiary, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $50,000,000 and 4.5% of Consolidated Total Assets, and any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness secured by Liens on the Collateral that are (or, if any Term B Obligations were then outstanding, would have been) pari passu with the Liens securing the Term B Obligations so long as, at the time of and after giving effect to the issuance or incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the proceeds thereof), the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 3.50 to 1.00, provided, (A) that the incurrence of any Indebtedness for borrowed money pursuant to this clause (l)(i) shall be subject to the penultimate paragraph of this Section 6.01 and if any such Indebtedness incurred pursuant to clause (l)(i) is secured by pari passu Liens on Collateral pursuant to Section 6.02(ii) and is in the form of term loans (other than High Yield-Style Loans), then the incurrence of such Indebtedness pursuant to clause (l)(i) shall be further subject to the last paragraph of this Section 6.01 to the extent applicable and (B) any such Indebtedness incurred by any Subsidiary that is not a Guarantor shall not exceed at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal amount of any other non-Guarantor Indebtedness outstanding pursuant to pay Section 6.01(h)(i), (r)(i) and (s)(i), the deferred greater of $25,000,000 and 2.5% of Consolidated Total Assets, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(m) Guarantees (i) by any Loan Party of any Indebtedness of the Borrower or any Subsidiary permitted to be incurred under this Agreement, (ii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that (x) Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations under this Agreement to at least the same extent as such underlying Indebtedness is subordinated and (y) no Guarantee by any Subsidiary of any Junior Financing shall be permitted unless such Subsidiary has also provided a Guarantee of the Loan Obligations pursuant to the Guarantee Agreement;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(hp) Guarantees by Indebtedness incurred under the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this ABL Credit Agreement (and or under any other credit facility with availability subject to a borrowing base formula) with aggregate commitments in an amount not prohibited to be incurred by exceed the Borrower or Permitted ABL Commitment Amount on the date such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06commitments are established;
(iq) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets consistent with past or inventory in connection with customer financing arrangements in the ordinary course of businessindustry practice;
(mr) (i) other Indebtedness secured by Liens on the Collateral that are junior to the Liens on the Collateral securing the Loan Obligations under this Agreement, so long as after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the Borrower and/or any Subsidiary with respect proceeds thereof), the Net Secured Leverage Ratio on a Pro Forma Basis is not greater than 4.50 to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date1.00; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets incurrence of any Indebtedness for borrowed money pursuant to this clause (r)(i) shall be subject to such Indebtedness were acquired the penultimate paragraph of this Section 6.01 and (B) was any such Indebtedness incurred by any Subsidiary that is not created or incurred in anticipation a Guarantor shall not exceed at the time of, and after giving effect to, the incurrence thereof, together with the aggregate principal amount of any other non-Guarantor Indebtedness outstanding pursuant to Section 6.01(h)(i), (l)(i) and (s)(i), the greater of $25,000,000 and 2.5% of Consolidated Total Assets; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(s) other unsecured Indebtedness so long as the Total Net Leverage Ratio on a Pro Forma Basis immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof (but without netting any of the proceeds thereof) is not greater than 5.00 to 1.00; provided, (A) that the incurrence of any Indebtedness for borrowed money pursuant to this clause (s)(i) shall be subject to the penultimate paragraph of this Section 6.01 and (B) any such Indebtedness incurred by any Subsidiary that is not a Guarantor shall not exceed at the time of, and after giving effect to, the incurrence thereof, together with the aggregate outstanding principal amount of such any other non-Guarantor Indebtedness does outstanding pursuant to Section 6.01(h)(i), (l)(i) and (r)(i), the greater of $25,000,000 and 2.5% of Consolidated Total Assets and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(t) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $20,000,000 25,000,000 and 252.5% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodTotal Assets, and any Permitted Refinancing Indebtedness in respect thereof;
(ou) Indebtedness consisting incurred in the ordinary course of promissory notes issued by business in respect of obligations of the Borrower or any Subsidiary to any stockholder pay the deferred purchase price of any Parent Company 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 consistent with past or industry practice and not in connection with the borrowing of money or any current Hedging Agreements.
(v) Indebtedness representing deferred compensation to employees, consultants or former director, officer, employee, member independent contractors of management, manager or consultant of any Parent Company, the Borrower (or, to the extent such work is done for Borrower or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary (incurred in the ordinary course of business consistent with past or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a)industry practice;
(pw) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), in connection with Permitted Receivables Financings.
(i)) Indebtedness represented by the Second Lien Secured Notes in an aggregate principal amount not to exceed on the date of incurrence, $350,000,000, and (j), (m), (n), (q), (r), (u), (w), ii) any Permitted Refinancing Indebtedness in respect thereof;
(y), ) obligations in respect of Cash Management Agreements;
(z), (bb) and/or (ff) of this Section 6.01 (in Refinancing Notes hereunder and any case, including any refinancing Permitted Refinancing Indebtedness incurred in respect thereof;
(i) Indebtedness in an aggregate principal amount not to exceed at the time of incurrence an amount equal to clause (i) of the definition of Incremental Amount at such time, “Refinancing Indebtedness”and (ii) and any subsequent Permitted Refinancing Indebtedness in respect thereof; 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 that (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (B) an amount equal to incurrence of any existing commitments unutilized thereunder and (C) additional amounts permitted to be incurred Indebtedness for borrowed money pursuant to this clause (aa) shall be subject to the penultimate paragraph of this Section 6.01 (provided, that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, if any such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred pursuant to Section 6.01(aa)(i) is secured by pari passu Liens on Collateral pursuant to Section 6.02(jj) and is in respect the form of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced term loans (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt thenHigh Yield-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (mStyle Loans), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of then the incurrence of such Indebtedness pursuant to Section 6.01(aa)(i) shall be further subject to the last paragraph of this Section 6.01 to the extent applicable;
(bb) [Reserved];
(cc) Indebtedness incurred on behalf of, or representing Guarantees of Indebtedness of, joint ventures that at the time of, and after giving effect theretoto, no Event the incurrence thereof, together with the aggregate amount of Default existsany other Indebtedness outstanding pursuant to this Section 6.01(cc), and
(vi) in would not exceed the case greater of Replacement Debt$25,000,000 and 2.5% of Consolidated Total Assets, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Permitted Refinancing Indebtedness that is pari passu or junior with in respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(Ddd) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined Indebtedness issued by the Borrower or any of its Subsidiary to current or former officers, directors and the lenders providing such Incurred Acquisition Debtemployees, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with their respective estates, spouses or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds offorme
Appears in 1 contract
Sources: First Lien Credit Agreement (DS Services of America, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incurissue, assume or otherwise become or remain liable with respect to or suffer to exist (collectively, “Incur”) any Indebtedness, except:
(a) the Secured Obligations (including Indebtedness of any Additional Term Loans and Loan Party pursuant to any Additional Opco Revolving Facility Repayment Term Loans)Loan Document;
(b) Indebtedness existing as of the Borrower to Closing Date and identified in Schedule 3.7(a) and any Subsidiary and/or Permitted Refinancing of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness;
(c) Indebtedness of the Borrower or any of its Subsidiaries (i) evidencing the deferred purchase price of newly acquired property or Incurred to finance the acquisition of or improvement of a fixed or capital asset of the Borrower or such Subsidiary used in the ordinary course of business of the Borrower or such Subsidiary (provided that such Indebtedness is Incurred within 180 days following the acquisition of such property or asset), and (ii) in respect of Capital Lease Obligations;
(i) Indebtedness of the Borrower payable to any Subsidiary must Loan Party and (ii) Indebtedness of a Loan Party payable to the Borrower or any other Loan Party, in each case, such indebtedness to be unsecured and expressly subordinated to the Obligations of the Borrower Loan Parties under the Loan Documents on terms that are acceptable and conditions satisfactory to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementAgent;
(e) Indebtedness of a Subsidiary of Holdings that is not a Loan Party owed to the Borrower and/or or to a Wholly-Owned Subsidiary of the Borrower that is a Loan Party to the extent permitted by Section 6.7(f);
(f) Hedge Obligations arising under any Subsidiary (i) Hedge Agreement required under Section 5.9 or any other Hedge Agreement permitted pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds Section 6.11;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations incurred instrument drawn against insufficient funds in the ordinary course of business of the Borrower and its Subsidiaries; provided that such Indebtedness is extinguished within five Business Days of Incurrence;
(iih) Indebtedness consisting of repurchase obligations of the Master Repurchase Sellers under the Warehouse Facility; provided that in no event shall (a) the aggregate obligations in respect of letters the financing of credit, bank guaranties, surety bonds, performance bonds any “LLC Interests” under and as described in the Warehouse Facility documentation exceed $150,000,000 or similar instruments to support (b) any of principal amount repaid under the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance Warehouse Facility be drawn or similar programsborrowed again;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations Contingent Obligations of the Borrower and/or any Subsidiary to pay not exceeding ten (10) percent of the deferred purchase price of goods or services or progress payments in connection with such goods aggregate commitments under the Warehouse Facility;
(j) Contingent liabilities under surety bonds, customs and services appeal bonds, governmental contracts and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties leases or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into Incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of any Group Member (excluding Contingent Obligations) acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the Borrower and/or any Subsidiary consisting time and as a result of obligations owing under incentive a Permitted Acquisition);
(including dealer incentive)1) Indebtedness in respect of workers’compensation claims, supplyself-insurance obligations, distributionperformance bonds, resale, vendor, license, sublicense export or import indemnitees or similar agreements entered into instruments, customs bonds, governmental contracts, leases, surety appeal or similar bonds and completion guarantees provided by a Group Member in the ordinary course of its business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
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Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01), and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany NoteSection 2.21 (whether prior to, on or after the Ninth Incremental Assumption and Amendment Agreement Effective Date)) and under the other Loan Documents, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit I hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry practices, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in the ordinary course of business or other cash management services, in each case incurred in the ordinary course of business business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement; provided, that, (w) in the case of any such Indebtedness secured by Liens on Collateral that are Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 3.20 to 1.00 or (II) not greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, (x) in the case of any such Indebtedness secured by Liens on Collateral that are Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 3.60 to
1. 00 or (II) not greater than the Net Secured Leverage Ratio in effect immediately prior thereto, (y) in the case of any other such Indebtedness, the Interest Coverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not less than 2.00 to 1.00 or (II) not less than the Interest Coverage Ratio in effect immediately prior thereto and (z) in the case of any such Indebtedness incurred under this clause (h) by a Subsidiary other than a Subsidiary Loan Party, the aggregate outstanding principal amount of such Indebtedness immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions shall not exceed the greater of $350,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, further, that the incurrence (but not assumption) of term loan Indebtedness pursuant to clause (i)(w) above shall be subject to the last paragraph of Section 6.02; and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments any Permitted Refinancing Indebtedness incurred to support Refinance any of the foregoing itemssuch Indebtedness;
(fi) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed the greater of $250,000,000 and 0.075 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (y) any Permitted Refinancing Indebtedness in respect thereof;
(i) Capitalized Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 6.03, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) other Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $350,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(l) Indebtedness of the Borrower and/or or any Subsidiary Subsidiaries in respect an aggregate outstanding principal amount not greater than 100% of Banking Services and/or otherwise the net cash proceeds received by the Borrower after the Closing Date from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the net cash proceeds from the issuance and sale by Holdings or a Parent Entity of its Qualified Equity Interests or a contribution to its common equity (in connection with Cash management each case of (x) and Deposit Accounts(y), including incentiveother than proceeds from the sale of Equity Interests to, supplier finance or similar programscontributions from, the Borrower or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions;
(m) Guarantees (i) guaranties by Holdings, the Borrower and/or or any Subsidiary Loan Party of any Indebtedness of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of businessBorrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (ii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business in respect on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of obligations any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower and/or or any Subsidiary to pay the deferred providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the 2015 Transactions, the ADT Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(hp) Guarantees by the Borrower and/or any Subsidiary of (i) Indebtedness, including Indebtedness or other obligations in respect of the BorrowerSecond Priority Senior Secured Notes, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred in an aggregate principal amount outstanding pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or 6.01(p) not to exceed $1,246,000,000 and (ii) any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that Permitted Refinancing Indebtedness in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06respect thereof;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, secured by Liens on the Closing Date; provided, Collateral that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA are Other First Liens so long as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder immediately after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect theretothe use of proceeds thereof, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a Net First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto Leverage Ratio on a Pro Forma Basis as is not greater than 3.20 to 1.00; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (q)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the last day aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(q)(i), Section 6.01(r)(i) and Section 6.01(s)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $475,000,000 and 0.17 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) Period and (y) the final maturity date with incurrence of term loan Indebtedness pursuant to this clause (q)(i) shall be subject to the last paragraph of Section 6.01 and the last paragraph of Section 6.02, and (ii) any Permitted Refinancing Indebtedness in respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(Di) subject Indebtedness secured by Liens on Collateral that are Junior Liens so long as immediately after giving effect to clause (1) above, the incurrence of such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower Indebtedness and the lenders providing such Incurred Acquisition Debtuse of proceeds thereof, and
(E) such Incurred Acquisition Debt the Net Secured Leverage Ratio on a Pro Forma Basis is not greater than 3.60 to 1.00; provided that (x) may rank pari passu the aggregate principal amount of Indebtedness outstanding under this clause (r)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with or junior the aggregate principal amount of any other Indebtedness outstanding pursuant to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; providedSection 6.01(q)(i), that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured this Section 6.01(r)(i) and Section 6.01(s)(i) that are incurred by any assets Subsidiaries other than the Collateral Subsidiary Loan Parties, the greater of $475,000,000 and 0.17 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any term loan Indebtedness pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) unsecured Indebtedness so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Interest Coverage Ratio on a Pro Forma Basis is not less than 2.00 to 1.00; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (s)(i) at such time that is incurred by a Subsidiary other than with respect to proceeds ofthan
Appears in 1 contract
Sources: Incremental Assumption and Amendment Agreement (ADT Inc.)
Indebtedness. The Borrower (a) No Credit Party shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
except (awithout duplication) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of Indebtedness secured by purchase money bonds or other similar obligations incurred security interests and Capital Leases permitted in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of businessSection 6.7(d), (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a)insurance, (i)iii) the Loans and the other Obligations, (j)iv) unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law, (m), v) existing Indebtedness described in Disclosure Schedule (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”6.3) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) refinancings thereof or amendments or modifications thereto that do not have the effect of increasing the principal amount of such Indebtedness does not exceed thereof or changing the principal amount amortization thereof (other than to extend the same) and that are otherwise on terms and conditions no less favorable to any Credit Party, Agent or any Lender, as reasonably determined by Agent, than the terms of the Indebtedness being refinanced, refunded amended or replacedmodified, except (vi) Indebtedness under the GE Credit Agreement evidenced by the GE Credit Agreement Documents and refinancings thereof or amendments thereto, to the extent permitted hereunder and by the SREF Intercreditor Agreement, (Avii) an amount equal Indebtedness incurred by the Borrowers pursuant to unpaid accrued interestthe Trade Lien Program as in effect on the date hereof or otherwise on terms reasonably acceptable to the Agent subject to the Trade Lien Intercreditor Agreement, penalties and premiums (including tender premiumsviii) thereon plus underwriting discountsunsecured Indebtedness not to exceed $5,000,000, other reasonable and customary fees(ix) Indebtedness, commissions and expenses (including upfront feeson terms satisfactory to Agent, original issue discount or initial yield payments) incurred in connection with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 issuance of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u)surety bond under PACA, (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause Sections 6.6 and 6.7, (axi) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) of any covenants or other provisions applicable only to periods Credit Party arising after the applicable maturity date hereof in the ordinary course of the debt then-being refinanced as business of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type Credit Party pursuant to guarantees in favor of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit third parties by such Credit Party of the Lenders orobligations of its wholesale customers under leases of real or personal property from such third parties by such wholesale customers, as applicableprovided, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01that, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood maximum aggregate amount that secured Indebtedness the Credit Parties may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated required to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth pay in any applicable Intercreditor AgreementFiscal Year pursuant to such guarantees, shall not exceed $1,000,000, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of entering into any such guarantee, the incurrence Excess Availability shall be not less than $50,000,000 and (C) as of the date of entering into any such Indebtedness guarantee and after giving effect thereto, no Default or Event of Default existsshall exist or have occurred; and (xii) Indebtedness consisting of intercompany loans and advances made by any Credit Party to any other Credit Party; provided, and
(vi) in the case of Replacement Debt, that: (A) each Credit Party shall have executed and delivered to each other Credit Party, on the Closing Date, (1) a demand note (collectively, the “Intercompany Notes”) to evidence any such intercompany Indebtedness is pari passu or junior owing at any time by such Credit Party to such other Credit Party which Intercompany Notes shall be in right of payment form and secured by the Collateral on a pari passu or junior basis with respect substance reasonably satisfactory to Agent and such Intercompany Notes shall be pledged and delivered to Agent, subject to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable SREF Intercreditor Agreement, and (2) the applicable Pledge Agreement or Security Agreement as additional collateral security for the Obligations; (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, each Borrower shall record all intercompany transactions on its books and records in a manner reasonably satisfactory to Agent; (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it obligations of each Credit Party under any such Intercompany Notes shall not be Guaranteed by any Person and subordinated to the Obligations of such Borrower hereunder in a manner reasonably satisfactory to Agent; (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that at the time any such Refinancing Indebtedness that intercompany loan or advance is pari passu with the Initial Term Loans hereunder in right of payment and secured made by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as other Credit Party and after giving effect thereto on a Pro Forma Basis as thereto, each such Borrower shall be Solvent; and (E) no Default or Event of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), Default would occur and be continuing after giving effect to any related transaction such proposed intercompany loan.
(b) No Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in connection therewith and all customary pro forma events and adjustments (such respect of any Indebtedness, “Incurred Acquisition Debt”):
other than (i) if such the Obligations; (ii) the obligations under the GE Credit Agreement; (iii) Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basisPermitted Encumbrance or other Liens permitted by Section 6.7(b), the First Lien Leverage Ratio does not exceed 3.40:1.00;
(iid), (e) or (f) if the asset securing such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basishas been sold or otherwise disposed of in accordance with Section 6.8(b), the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iiic) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
d); (iv) provided, that:
(AIndebtedness permitted by Section 6.3(a)(v) the MFN Provision shall apply to upon any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described refinancing thereof in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) accordance with Section 6.3(a)(v); and (yv) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans permitted in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofSection 6.14.
Appears in 1 contract
Sources: Credit Agreement (Penn Traffic Co)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date and set forth on Schedule 6.01 (including any Additional Term Loans excluding Indebtedness under clause (b) of this Section 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Subsidiary of the Borrower);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]Indebtedness of the Borrower and its Subsidiaries pursuant to Swap Agreements permitted by Section 6.12;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary of its Subsidiaries pursuant to any reimbursement or indemnification obligations to such agreementPerson; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or or any of its Subsidiaries owing to the Borrower or any Subsidiary of the Borrower to the extent permitted by Section 6.04, provided that such Indebtedness shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent (ithe “Subordinated Intercompany Debt”);
(f) pursuant to tendersIndebtedness in respect of performance bonds, statutory warranty bonds, bid bonds, appeal bonds, surety bonds, labor bonds and completion or performance guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) Indebtedness arising out of advances on exports, advances on imports, customer prepayments and similar transactions in respect the ordinary course of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsbusiness and consistent with past practice;
(fg) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programs;
(i) guaranties by instrument drawn against insufficient funds in the Borrower and/or any Subsidiary ordinary course of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees business or other cash management services in the ordinary course of business, provided that (iix) such Indebtedness incurred in the ordinary course (other than credit or purchase cards) is extinguished within five Business Days of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services its incurrence and (iiiy) such Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties credit or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment purchase cards is permitted under Section 6.06extinguished within 60 days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a Person merged into, amalgamated or consolidated with the Borrower and/or or any Subsidiary existing, or pursuant to commitments existing, on of its Subsidiaries after the Closing Date; providedDate and Indebtedness assumed in connection with the acquisition of assets, that which Indebtedness in each case, exists at the time of such acquisition, merger, amalgamation or consolidation and is not created in contemplation of such event and where such acquisition, merger, amalgamation or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness, provided that, solely with respect to a Person being merged into, amalgamated or consolidated with the Borrower or any of its Subsidiaries and Indebtedness being assumed in connection with the acquisition of assets, the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger, amalgamation or consolidation, such assumption or such incurrence, as applicable would not exceed U.S. $30,000,000;
(i) Capital Lease Obligations and purchase money Indebtedness incurred by the Borrower or any of its Subsidiaries prior to or within 90 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in excess of order to finance such acquisition, lease or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof would not exceed U.S. $5,000,000 shall be described on Schedule 6.0125,000,000;
(j) Surety Bond IndebtednessCapital Lease Obligations incurred by the Borrower or any of its Subsidiaries in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) Indebtedness of the Borrower and/or other unsecured Indebtedness, in an aggregate principal amount at any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businesstime outstanding pursuant to this Section 6.01(k) not to exceed U.S. $50,000,000;
(l) Guarantees (i) by any Loan Party of any Indebtedness of any other Loan Party or any other Subsidiary of the Borrower and (ii) by any Subsidiary that is not a Loan Party of Indebtedness of the Borrower and/or or any Subsidiary consisting of (iits Subsidiaries; provided that Guarantees by the Borrower or any of its Subsidiaries under this Section 6.01(l) of any other Indebtedness of a Person that is subordinated to other Indebtedness of such Person shall be expressly subordinated to the financing of insurance premiumsObligations on terms consistent with those used, (ii) take-or-pay obligations contained in supply arrangementsor to be used, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessfor Subordinated Intercompany Debt;
(m) Indebtedness arising from agreements of the Borrower and/or or any of its Subsidiaries providing for indemnification, adjustment of purchase price, earn outs or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary with respect to Capital Leases and purchase money of Borrower, other than Guarantees of Indebtedness in an aggregate outstanding principal amount not to exceed the greater incurred by any Person acquiring all or any portion of $52,850,000 and 35% of Consolidated Adjusted EBITDA as such business, assets or a Subsidiary of the last day Borrower for the purpose of the most recently ended Test Periodfinancing such acquisition;
(n) Indebtedness supported by a letter of any Person that becomes credit issued pursuant to the Multi-Year Credit Facility, in a Subsidiary or Indebtedness assumed principal amount not in connection with any acquisition or similar Investment permitted hereunder after excess of the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal stated amount of such Indebtedness does not exceed the greater letter of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Periodcredit;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary Permitted Senior Unsecured Debt in an aggregate principal amount not to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a)exceed U.S. $200,000,000;
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) the Loan Parties pursuant to the Multi-Year Credit Facility and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Permitted Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) Refinance such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) (i) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date and/or assumed in an outstanding principal amount not to exceed in connection with Section 6.04(j); provided that the aggregate amount of such Indebtedness outstanding pursuant to this Section 6.01(q) shall not exceed U.S. $100,000,000 and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(r) Indebtedness consisting of insurance premium financing arrangements; and
(s) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in paragraphs (a) the Fixed Incremental Amount plus through (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1r) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 1 contract
Sources: 364 Day Revolving Credit Agreement (Frank's International N.V.)
Indebtedness. The Borrower Each of the Loan Parties shall not, nor and shall it not permit any of its Subsidiaries to, directly or indirectly, at any time create, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(ai) Indebtedness under the Secured Obligations Loan Documents;
(ii) Indebtedness under the Standalone Letters of Credit as they exist on the Closing Date (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loansextensions or renewals thereof);
(biii) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower set forth on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) Schedule 8.2.1 (including pursuant to an Intercompany Noteany extensions or renewals thereof);
(civ) [reserved]Indebtedness incurred with respect to Purchase Money Security Interests and capitalized leases;
(dv) Indebtedness arising from (a) of a Loan Party to another Loan Party, (b) of a Loan Party to any agreement providing for indemnificationwholly owned Subsidiary of a Loan Party, adjustment or (b) of purchase price or similar obligations (including contingent earn-out obligations) incurred any Foreign Subsidiary to another Foreign Subsidiary, which in connection each case with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior respect to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary foregoing clauses (a) through (c) is subordinated pursuant to any such agreementthe Intercompany Subordination Agreement;
(evi) Indebtedness of the Borrower and/or owed to any Subsidiary (i) Person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to tendersreimbursement or indemnification obligations to such person, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations in each case incurred in the ordinary course of business and business;
(iivii) Indebtedness owed to any Person in respect of letters of creditperformance bonds, bank guarantiesbid bonds, appeal bonds, surety bondsbonds and similar obligations, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, ;
(iiviii) Indebtedness incurred of the Foreign Subsidiaries (other than Indebtedness to another Foreign Subsidiary which is governed by clause (v) above);
(ix) Indebtedness and other obligations in respect of netting services, overdraft protections and similar arrangements in each case in connection with cash management agreements and deposit accounts in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and business;
(iiix) Indebtedness in respect of letters bankers’ acceptance, letter of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts receipt or similar facilities entered into in the ordinary course of business;
(hxi) Guarantees Guaranties permitted by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.068.2.3 [Guaranties];
(xii) Any (i) Indebtedness of the Borrower and/or any Subsidiary existingLender Provided Swap Agreement, or pursuant to commitments existing(ii) Indebtedness under any Other Lender Provided Financial Services Product; provided however, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 Loan Parties and their Subsidiaries shall be described on Schedule 6.01enter into a Lender Provided Swap Agreement only for hedging (rather than speculative) purposes;
(jxiii) Surety Bond Indebtedness;Any other Qualified Swap Agreement; and
(kxiv) Any unsecured Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into not otherwise permitted in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of items (i) the financing of insurance premiums, through (iiix) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness above which does not exceed the greater of Fifty Million and 00/100 Dollars ($20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv50,000,000.00) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of aggregate at any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofoutstanding.
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Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
except the following (and, in each case, any Permitted Refinancing Indebtedness in respect thereof): (a) Indebtedness existing on the Secured Obligations Closing Date and set forth on Schedule 7.2 (including other than intercompany Indebtedness refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term LoansRestricted Subsidiary);
; (b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other SubsidiaryLoan Documents; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Notec);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(ei) Indebtedness of the Borrower and/or any Subsidiary (i) Group Members pursuant to tendersSwap Agreements that are not entered into for purposes of speculation, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred (ii) Indebtedness under any Cash Management Agreement entered into in the ordinary course of business and (iiiii) Indebtedness consisting solely of (x) cash collateralized letters of credit and deposits in connection with rent for leased real property in the ordinary course of business and (y) other amounts deposited in connection with an Investment permitted under Section 7.7, ordinary course or support obligations arising in the ordinary course of business or customer deposits and advance payments received in the ordinary course of business from customers for goods and services purchased in the ordinary course of business; (d) Indebtedness owed to (including obligations in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds bankers’ acceptances or similar instruments for the benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to support any of the foregoing items;
Group Member, pursuant to reimbursement or indemnification obligations to such Person; (fe) Indebtedness of the Borrower and/or or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsother Group Member to the Borrower or any other Group Member, including incentive, supplier finance or similar programs;
to the extent permitted by Section 7.7; provided that (i) guaranties by Indebtedness of any Loan Party to any Group Member that is not a Loan Party shall be subordinated to the Borrower and/or any Subsidiary Obligations pursuant to the Global Intercompany Note or otherwise on terms reasonably satisfactory to the Administrative Agent (at the direction of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of businessRequired Lenders), (ii) intercompany Indebtedness incurred in owing to any Loan Party shall be evidenced by the ordinary course of business in respect of obligations of Global Intercompany Note and shall be pledged pursuant to the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods Guarantee and services Collateral Agreement and (iii) Indebtedness of Group Members that are not Loan Parties owing to any Loan Party, together with any Investments by Loan Parties in Group Members that are not Loan Parties pursuant to Section 7.7(a)(A), Section 7.7(k) or Section 7.7(l) shall not exceed an aggregate amount equal to $10,000,000 (plus any return of capital actually received by the respective investors in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees Investments previously made by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred them pursuant to this Section 6.01 by the Borrower 7.7(a)(A), Section 7.7(k) or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such SubsidiarySection 7.7(l)); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(if) Indebtedness in respect of the Borrower and/or any Subsidiary existingperformance bonds, warranty bonds, bid bonds, appeal bonds, surety bonds and completion or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or performance guarantees and similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangementsobligations, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
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Indebtedness. The Borrower (a) No Credit Party shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
except (a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loanswithout duplication);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness secured by purchase money security interests and Capitalized Leases permitted in clause (c) of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiumsSection 6.7, (ii) take-or-pay obligations contained in supply arrangementsthe Loans and the other Obligations, in each case, in the ordinary course of business and/or (iii) unfunded pension fund and other employee benefit plan obligations and liabilities to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect extent they are permitted to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted remain unfunded under clauses (a)applicable law, (i), iv) existing Indebtedness described in DISCLOSURE SCHEDULE (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”6.3) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) refinancings thereof or amendments or modifications thereto which do not have the effect of increasing the principal amount of such Indebtedness does not exceed thereof or changing the principal amount amortization thereof (other than to extend the same) and which are otherwise on terms and conditions no less favorable to any Credit Party, Administrative Agent, Revolver Agent or any Lender, as reasonably determined by Administrative Agent, than the terms of the Indebtedness being refinanced, refunded amended or replacedmodified, except by (v) Indebtedness specifically permitted under SECTION 6.1, (vi) advances to employees specifically permitted under SECTION 6.4, (vii) Indebtedness consisting of intercompany loans and advances between any Borrower or any Secured Subsidiary, on the one hand, and any other Borrower or any other Secured Subsidiary, on the other hand, PROVIDED that (A) an amount equal each Borrower and each such Secured Subsidiary shall record all intercompany transactions on its books and records in a manner satisfactory to unpaid accrued interest, penalties 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 and the related refinancing transaction, Administrative Agent; (B) an amount equal to the obligations of each Borrower and each such Secured Subsidiary under 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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof intercompany loans shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations of Borrowers hereunder in right of payment, a manner satisfactory to Administrative Agent; (1C) at the time any such Refinancing Indebtedness intercompany loan or advance is contractually subordinated to the Obligations in right of payment, made between any Borrowers or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness Secured Subsidiaries and after giving effect thereto, each such Borrower and each such Secured Subsidiary shall be Solvent; (D) no Default or Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment would occur and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder continuing after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith such proposed intercompany loan; and all customary pro forma events (E) the aggregate amount of such intercompany Indebtedness owing by any Borrower or such Secured Subsidiary to any other Borrower or such Secured Subsidiary shall not exceed $200,000 at any one time outstanding; and adjustments (such Indebtednessviii) Indebtedness consisting of intercompany trade receivables between any Borrower or any Secured Subsidiary, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on one hand, and any other Borrower or any other Secured Subsidiary, on the Collateral other hand, PROVIDED that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision each Borrower and each such Secured Subsidiary shall apply record all intercompany transactions on its books and records in a manner satisfactory to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
Administrative Agent; (B) if the obligations of each Borrower and each such Incurred Acquisition Debt consists Secured Subsidiary under any such intercompany receivables shall be unsecured and subordinated to the Obligations of Indebtedness for borrowed money or Indebtedness of the kind described Borrowers hereunder in clause (c) of the definition thereof:
a manner satisfactory to Administrative Agent; (C) at the time any such intercompany receivable is created between any Borrowers or such Secured Subsidiaries and after giving effect thereto, each such Borrower and each such Secured Subsidiary shall be Solvent; (xD) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans no Default or Customary Term A Loans) shall not Event of Default would occur and be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without continuing after giving effect to any prepayment that would otherwise modify such proposed intercompany receivable; and (E) the Weighted Average Life to Maturity aggregate amount of such Term Loansintercompany receivable owing by any Borrower or such Secured Subsidiary to any other Borrower or such Secured Subsidiary shall not exceed $500,000 at any one time outstanding.
(b) No Credit Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness, other than (i) the Obligations, (ii) Indebtedness secured by a Permitted Encumbrance if the asset securing such Indebtedness has been sold or otherwise disposed of in accordance with SECTIONS 6.8(B) or (c) and (yiii) the final maturity date with respect to such Incurred Acquisition Debt other Indebtedness (other than Customary Bridge Loans or Customary Term A Loansexcluding Subordinated Debt) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class not in excess of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of$100,000.
Appears in 1 contract
Indebtedness. The Borrower shall notCreate, nor shall it permit any of its Subsidiaries toincur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);other Loan Documents, together with Indebtedness owed to Underlying Issuers with respect to Underlying Letters of Credit,
(b) Indebtedness set forth on Schedule 4.19 and any Refinancing Indebtedness in respect of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);Indebtedness,
(c) [reserved];Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such Indebtedness,
(d) Indebtedness arising from any agreement providing endorsement of instruments or other payment items for indemnificationdeposit, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;and
(e) Indebtedness consisting of unsecured intercompany loans and advances among Loan Parties, subject to the terms and provisions of the Borrower and/or any Subsidiary Intercompany Subordination Agreement;
(if) pursuant to tenders, statutory Noteholder Indebtedness;
(g) Indebtedness in respect of indemnification obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money appeal or customs bonds or other similar obligations incurred in the ordinary course of business and (ii) in respect of letters of creditsuch Person, bank guaranties, surety bonds, performance bonds or similar instruments to support so long as such Indebtedness is not secured by any of the foregoing itemsassets or properties of Loan Parties or any of their Subsidiaries;
(fh) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programscomposing Permitted Investments;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities under Hedge Agreements entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;Guaranties by any Loan Party of any Indebtedness of any other Loan Party which Indebtedness is permitted hereunder
(k) contingent obligations arising with respect to customary indemnification obligations in favor of purchasers in connection with Permitted Dispositions;
(l) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive)a check, supply, distribution, resale, vendor, license, sublicense draft or similar agreements entered into instrument drawn against insufficient funds in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person provided that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary is extinguished within three Business Days of notice to Borrower or the assets subject to such Indebtedness were acquired relevant Subsidiary of its incurrence and (B) was not created or incurred in anticipation thereof, and (ii) further provided that the aggregate outstanding principal amount of such Indebtedness does not exceed $500,000 at any time;
(m) purchase price adjustments in respect of working capital by any Loan Party in connection with any Permitted Acquisition, so long as the greater aggregate obligations in respect of $20,000,000 and 25% of Consolidated Adjusted EBITDA as such purchase price adjustments would not result in a breach of the last day limitations set forth in the definition of Permitted Acquisition;
(n) Indebtedness incurred in connection with the most recently ended Test Periodfinancing of insurance premiums in the ordinary course of business;
(o) Permitted Seller Indebtedness consisting and any Refinancing Indebtedness in respect of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a)such Indebtedness;
(p) Unsecured Indebtedness refinancingof Borrowers to USDS Canada, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken so long as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations pursuant to a subordination agreement in right of payment, (1) such Refinancing Indebtedness is contractually subordinated form and substance reasonably satisfactory to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, Agent; and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Unsecured Indebtedness incurred of USDS Canada to the Borrowers, in an aggregate amount which, when taken together with any Investments made by the Borrower to finance any acquisition or similar Investment Borrowers in USDS Canada as permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (cf) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term LoanPermitted Investments, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofexceed $1,000,000.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $1,000,000 shall be set forth on Schedule 6.01) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to tendersthe Loan Parties shall be subject to Section 6.04(b) and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit K hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and industry practices;
(iiig) Indebtedness in respect arising from the honoring by a bank or other financial institution of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(h) [Reserved];
(i) Capitalized Lease Obligations and mortgage financings incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate amount of any other Indebtedness outstanding pursuant to this Section 6.01(i), would not exceed the sum of (x) the greater of $5,000,000 and 0.046 times EBITDAR calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) Capitalized Lease Obligations in respect of the hangar known as “Building B” at Minneapolis-Saint ▇▇▇▇ International Airport, in the case of this clause (y), in an aggregate amount not to exceed $15,000,000 at any one time outstanding, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(j) Capitalized Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03 and any Permitted Refinancing Indebtedness in respect thereof;
(k) [Reserved];
(l) [Reserved];
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (ii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred hereunder to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower and/or or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to Loan Party under this Section 6.01 by 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations under this Agreement to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or such Subsidiaryany Subsidiary providing for indemnification, as applicableadjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the Transactions, any Permitted Business Acquisition, other obligations Investments or the disposition of the Borrower and/or any business, assets or a Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Agreement;
(io) Indebtedness in respect of the Borrower and/or any Subsidiary existingletters of credit, or pursuant to commitments existingbank guarantees, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense warehouse receipts or similar agreements entered into instruments issued to support performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(lp) Indebtedness to finance the acquisition or ownership of the Borrower and/or any Subsidiary aircrafts and aircraft equipment (including airframes, engines, appliances, equipment, instruments or related property), including (x) Capitalized Lease Obligations and (y) transactions through equipment trust certificates or enhanced equipment trust certificates structures;
(q) Indebtedness consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business;
(r) other unsecured Indebtedness or Indebtedness secured by Liens on the Collateral that are junior to, the Liens securing the Loan Obligations in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof, together with the aggregate amount of any other Indebtedness outstanding pursuant to this Section 6.01(r), would not exceed $10,000,000, and any Permitted Refinancing Indebtedness in respect thereof;
(s) [Reserved];
(t) [Reserved];
(u) Indebtedness incurred in the ordinary course of business and/or (iii) in respect of obligations of the Borrower or any Subsidiary to reacquire assets pay the deferred purchase price of goods or inventory services or progress payments in connection with customer financing arrangements 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 or any Hedging Agreements;
(v) Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower (or, to the extent such work is done for the Borrower or the Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(mw) Indebtedness obligations in respect of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodCash Management Agreements;
(nx) [Reserved];
(y) [Reserved];
(z) [Reserved];
(aa) Indebtedness incurred on behalf of, or representing Guarantees of any Person Indebtedness of, joint ventures that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or of, and after giving effect to, the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation incurrence thereof, and (ii) together with the aggregate outstanding principal amount of such any other Indebtedness does outstanding pursuant to this Section 6.01(aa), would not exceed the greater of $20,000,000 5,000,000 and 25% of Consolidated Adjusted EBITDA as of 0.046 times EBITDAR calculated on a Pro Forma Basis for the last day of the then most recently ended Test Period, and any Permitted Refinancing Indebtedness in respect thereof;
(obb) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officerdirectors and employees, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) estates, spouses or former spouses to finance the purchase or redemption of Capital Stock Equity Interests of Holdings or any Parent Company Entity permitted by Section 6.04(a)6.06;
(pcc) Indebtedness refinancing, refunding consisting of obligations of the Borrower or replacing any Subsidiary under deferred compensation or other similar arrangements incurred by such person in connection with the Transactions and Permitted Business Acquisitions or any other Investment permitted hereunder;
(dd) Indebtedness permitted under clauses of the Borrower or any Subsidiary to or on behalf of any joint venture (a), regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (i), including with respect to intercompany self-insurance arrangements) of the Borrower and the Subsidiaries;
(j), (m), (n), (q), (r), (u), (w), (y), (z), (bbee) and/or [Reserved];
(ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof[Reserved]; provided, that:and
(igg) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinancedall premium (if any, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties and premiums (including tender premiums) thereon plus underwriting discountsexpenses, other reasonable and customary defeasance costs, interest (including post-petition interest), fees, commissions expenses, charges and expenses additional or contingent interest on obligations described in clauses (including upfront fees, original issue discount a) through (ff) above or initial yield payments) incurred in connection refinancings thereof. For purposes of determining compliance with the relevant refinancing, refunding or replacement and the related refinancing transaction, (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 definition (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 secured6.01, the Lien securing such amount of any Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) denominated in any currency other than Dollars shall be calculated based on customary currency exchange rates in effect, in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has incurred (Ain respect of term Indebtedness) a final maturity equal or committed (in respect of revolving Indebtedness) on or prior to or later than (the Closing Date, on the Closing Date and, in the case of such Indebtedness incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness) after the Closing Date, does not require mandatory commitment reductionson the date on which such Indebtedness was incurred (in respect of term Indebtedness) or committed (in respect of revolving Indebtedness); provided, that if any, prior to) the earlier of such Indebtedness is incurred to refinance other Indebtedness denominated in a currency other than Dollars (x) the Latest Maturity Date and (y) the final maturity of or in a different currency from the Indebtedness being refinanced), refunded or replaced and (B) other than with respect such refinancing would cause the applicable Dollar-denominated restriction to revolving Indebtednessbe exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Refinancing Dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness has does not exceed (xi) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original or committed principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders oramount, as applicable, of such Indebtedness being refinanced plus (ii) the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
aggregate amount of fees, underwriting discounts, premiums (iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (mincluding tender premiums), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness defeasance costs and other costs and expenses incurred in respect connection with such refinancing. Further, for purposes of Indebtedness permitted under clause (a) of determining compliance with this Section 6.01, (A) such Indebtedness, if secured, is secured only Indebtedness need not be permitted solely by Permitted Liens at the time reference to one category of such refinancing, refunding or replacement permitted Indebtedness described in Sections 6.01(a) through (it being understood that secured Indebtedness gg) but may be refinanced with unsecured Indebtedness), permitted in part under any combination thereof and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such in the event that an item of Indebtedness is incurred by (or any portion thereof) meets the obligor criteria of one or obligors in respect more of the categories of permitted Indebtedness being refinanceddescribed in Sections 6.01(a) through (gg), refunded the Borrower shall, in its sole discretion, classify or replacedreclassify, except to the extent otherwise permitted pursuant to or later divide, classify or reclassify, such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 6.01 and will only be required to include the amount and type of such item of Indebtedness (it being understood that or any entity that was a guarantor portion thereof) in respect one of the relevant refinanced above clauses and such item of Indebtedness may shall be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded treated as having been incurred or replaced was expressly contractually subordinated existing pursuant to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement only one of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecuredclauses; provided, that any such Refinancing (i) all Indebtedness that is pari passu or junior under outstanding on the Closing Date under this Agreement shall at all times be deemed to have been incurred pursuant to clause (p)(i) of this Section 6.01. In addition, with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with was permitted to be incurred hereunder on the Initial Term Loans hereunder in right date of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) such incurrence, any voluntary prepayment Increased Amount of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) such Indebtedness incurred by the Borrower to finance any acquisition or similar Investment shall also be permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity date of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofincurrence.
Appears in 1 contract
Sources: Asset Based Revolving Credit Agreement (Sun Country Airlines Holdings, Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness of the Secured Obligations (including any Additional Term Loans Borrower and its subsidiaries existing on the Effective Date and set forth in Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term Loans)Indebtedness evidencing a refinancing, refunding, renewal or extension of such Indebtedness;
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]intercompany Indebtedness of the Borrower, the Subsidiaries and the Guarantors to the extent permitted by Section 6.03(c);
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, under performance bonds or similar instruments securing the performance of the Borrower with respect to workers’ compensation claims, property casualty or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (i) pursuant to tendersliability insurance, statutory take-or-pay obligations in supply arrangements, self insurance obligations, bidsperformance, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bid and surety bonds or other similar obligations and completion guaranties in each case incurred in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(he) Guarantees Indebtedness incurred by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture the Subsidiaries or the Guarantors with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by Hedging Agreements in the Borrower or such Subsidiary, as applicable, or other obligations ordinary course of the Borrower and/or any Subsidiary not prohibited by this Agreement (business and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06for speculative purposes;
(i) Indebtedness incurred by the Borrower, the Subsidiaries or the Guarantors in respect of netting services, overdraft protections and otherwise in connection with deposit accounts, in each case, other than Indebtedness for borrowed money and (ii) Indebtedness arising from the Borrower and/or any Subsidiary existing, honoring of a check or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01draft drawn against insufficient funds;
(jg) Surety Bond Indebtednessguarantees and any other contingent obligations of the Borrower, the Subsidiaries and the Guarantors in respect of Indebtedness otherwise permitted hereunder (both before or after any liability associated therewith becomes fixed);
(kh) Indebtedness which may be deemed to exist pursuant to any guaranties, letters of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense credit or similar agreements entered into obligations incurred in the ordinary course of business;
(i) Indebtedness incurred by the Borrower or any of its Subsidiaries arising from agreements providing for indemnification, holdbacks, working capital or other purchase price adjustments, earn-outs, non-compete agreements, deferred compensation or similar obligations;
(j) Indebtedness with respect to Capital Lease Obligations in an aggregate amount, together with all Indebtedness incurred pursuant to clauses (l) and (m) of this Section 6.01, not to exceed at any one time outstanding $20,000,000;
(k) Indebtedness owed to any Person providing property, casualty, business interruption or liability insurance to the Borrower, any Subsidiary or any Guarantor, so long as such Indebtedness shall not be in excess of the Borrower and/or amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the annual period in which such Indebtedness is incurred and such Indebtedness shall be outstanding only during such year;
(l) Purchase money Indebtedness in an aggregate amount, together with all Indebtedness incurred pursuant to clauses (j) and (m) of this Section 6.01, not to exceed at any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessone time outstanding $20,000,000;
(m) Indebtedness in respect of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness slot machine financing arrangements in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) amount, together with all Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts permitted to be incurred pursuant to this Section 6.01 clauses (provided, that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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 permittedj) and (2) if such additional Indebtedness is secured, the Lien securing such Indebtedness satisfies the applicable requirements of Section 6.02),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amountl) of this Section 6.01, the incurrence thereof shall be without duplication of not to exceed at any amounts one time outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, $20,000,000; and
(vin) other Indebtedness of the Borrower, the Subsidiaries and the Guarantors (not listed in Sections 6.01(a) through 6.01(m)) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding aggregate principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of exceeding $10,000,000 at any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds oftime outstanding.
Appears in 1 contract
Indebtedness. The Borrower shall Company will not, nor shall it and will not permit any of its Subsidiaries Subsidiary to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)other Indebtedness created under the Loan Documents;
(b) Indebtedness existing on the Effective Date and set forth on Schedule 6.01 and Refinancing Indebtedness in respect of any of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)foregoing;
(c) [reserved]Indebtedness of the Company or any Subsidiary to the Company or any Subsidiary; provided that (A) any such Indebtedness owing by the Company or any Subsidiary Guarantor shall be unsecured and shall be subordinated in right of payment to the Secured Obligations on terms customary for intercompany subordinated Indebtedness, as reasonably determined by the Administrative Agent, (B) any such Indebtedness owing to the Company or any Subsidiary Guarantor shall be evidenced by a promissory note which shall have been pledged pursuant to the Security Agreement and (C) any such Indebtedness owing by any Subsidiary that is not a Subsidiary Guarantor to any Subsidiary Guarantor shall be incurred in compliance with Section 6.04(d);
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) Guarantees incurred in connection compliance with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementSection 6.04;
(e) Permitted First Priority Refinancing Indebtedness, Permitted Second Priority Refinancing Indebtedness of the Borrower and/or and any Subsidiary (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 ordinary course of business and (ii) Refinancing Indebtedness in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programsforegoing;
(i) guaranties Indebtedness of the Company or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations, purchase money Indebtedness and any Indebtedness assumed by the Borrower and/or Company or any Subsidiary in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the obligations acquisition thereof and (ii) Refinancing Indebtedness in respect of suppliersIndebtedness incurred or assumed pursuant to clause (i) above; provided that the aggregate principal amount of Indebtedness permitted by this clause (f) shall not exceed the greater of (x) $30,000,000 and (y) 3% of Consolidated Total Assets (at the time of incurrence);
(g) (i) Indebtedness of any Person that becomes a Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Subsidiary in a transaction permitted hereunder) after the Effective Date, distributorsor Indebtedness of any Person that is assumed by any Subsidiary in connection with an acquisition of assets by such Subsidiary in a Permitted Acquisition; provided that such Indebtedness exists at the time such Person becomes a 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 Subsidiary (or such merger or consolidation) or such assets being acquired, resellersand (ii) Refinancing Indebtedness in respect of Indebtedness assumed pursuant to clause (i) above; provided further that the aggregate principal amount of Indebtedness permitted by this clause (g) shall not exceed the greater of (x) $50,000,000 and (y) 5% of Consolidated Total Assets (at the time of incurrence);
(h) Permitted Unsecured Indebtedness and Refinancing Indebtedness in respect thereof; provided that, customers(i) immediately prior to and immediately after giving effect (including pro forma effect) to the incurrence of any Permitted Unsecured Indebtedness under this clause (h), licensees no Default shall have occurred and sublicensees in the ordinary course of businessbe continuing, (ii) immediately after giving effect (including pro forma effect) to the incurrence of any Permitted Unsecured Indebtedness, the Total Leverage Ratio, calculated on a pro forma basis for the period of four (4) consecutive fiscal quarters ending on the most recent fiscal quarter of the Company for which Financials have been delivered, shall not exceed the maximum Total Leverage Ratio permitted pursuant to Section 6.12(a) less 0.25:1.00, and (iii) the Company will, on the date of incurrence of such Indebtedness, deliver to the Administrative Agent a certificate of a Financial Officer of the Company, dated such date, confirming the satisfaction of the conditions set forth above and attaching a reasonably detailed calculation evidencing compliance with the condition set forth in the preceding clause (ii), identifying the Permitted Unsecured Indebtedness being incurred and specifying that it is being incurred pursuant to this clause (h); provided further that the aggregate amount of Indebtedness incurred by a Subsidiary that is not a Subsidiary Guarantor under this Section 6.01(h) shall not exceed the greater of (x) $25,000,000 and (y) 2.5% of Consolidated Total Assets (at the time of incurrence);
(i) Indebtedness incurred in the ordinary course of business and owed in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or overdrafts and related liabilities arising from treasury, depository and cash management services or progress payments in connection with such goods and services and any automated clearing-house transfers of funds;
(iiij) Indebtedness in respect of (1) letters of credit, bankers’ acceptances, bank guaranties or guarantees and similar instruments supporting trade payablesissued for the account of, warehouse receipts and (2) lines of credit established for the account of, the Company or similar facilities entered into any Subsidiary, in the case of each of clauses (1) and (2) in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness business supporting or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect drawn to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiarysupport, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness workers’ compensation, health, disability or other employee benefits, casualty or liability insurance, unemployment insurance and other social security laws and local state and federal payroll taxes, (ii) obligations in connection with self-insurance arrangements in the ordinary course of the Borrower and/or any Subsidiary existingbusiness and (iii) bids, or pursuant to commitments existingtrade contracts, on the Closing Date; providedleases, that any such Indebtedness in excess statutory obligations, surety and appeal bonds, performance and reclamation bonds and obligations of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtednessa like nature;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense client advances or similar agreements entered into deposits received in the ordinary course of business;
(l) Indebtedness of the Borrower and/or Company or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course form of business and/or purchase price adjustments (iii) obligations to reacquire assets including in respect of working capital), earnouts, deferred compensation, indemnification or inventory other arrangements representing acquisition consideration or deferred payments of a similar nature incurred in connection with customer any Permitted Acquisition or other Investments permitted under Section 6.04 or Dispositions permitted under Section 6.05;
(m) Indebtedness of Foreign Subsidiaries and Refinancing Indebtedness in respect thereof; provided that, the aggregate principal amount of Indebtedness permitted by this clause (m) shall not exceed the greater of (x) $50,000,000 and (y) 5% of Consolidated Total Assets (at the time of incurrence);
(n) Indebtedness relating to premium financing arrangements for property and casualty insurance plans and health and welfare benefit plans (including health and workers compensation insurance, employment practices liability insurance and directors and officers insurance), if incurred in the ordinary course of business;
(mo) other unsecured and Subordinated Indebtedness not otherwise described above, and Refinancing Indebtedness in respect thereof, in an aggregate principal amount at any time outstanding not in excess of the greater of $50,000,000 and (y) 5% of Consolidated Total Assets;
(p) unfunded pension fund and other employee benefit plan obligations and liabilities to the extent they are permitted to remain unfunded under applicable law;
(q) Indebtedness of the Borrower and/or Company or any Subsidiary of its Subsidiaries in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business, including guarantees or obligations with respect to Capital Leases letters of credit supporting such performance bonds, bid bonds, appeal bonds, surety bonds and purchase money similar obligations;
(r) Indebtedness in respect to judgments or awards under circumstances not giving rise to an Event of Default;
(s) Indebtedness in respect of obligations that are being contested in accordance with Section 5.04;
(t) Indebtedness representing deferred compensation, severance, pension, and health and welfare retirement benefits or the equivalent to current and former employees of the Company and its Subsidiaries incurred in the ordinary course of business or existing on the Effective Date;
(u) Permitted TEU Notes in an aggregate outstanding principal amount not to exceed the greater of exceeding $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;27,385,640 at any time outstanding; and
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(ov) Indebtedness consisting of promissory notes issued by the Borrower Company or any Subsidiary to any stockholder of any Parent Company or any current present or former directoremployees, officerofficers, employee, member of management, manager directors or consultant of any Parent Company, the Borrower or any Subsidiary consultants (or their respective Immediate Family Membersestates or beneficiaries under their estates) to finance the purchase or redemption of Capital Stock Equity Interests of any Parent the Company permitted by Section 6.04(a);
6.09. For purposes of determining compliance with this Section 6.01, in the event that an item of Indebtedness (por any portion thereof) meets the criteria of more than one of the categories of permitted Indebtedness refinancing, refunding or replacing any Indebtedness permitted under described in clauses (a)) through (v) above, the Company, in its sole discretion, will be permitted to divide and classify such item of Indebtedness (i)or any portion thereof) on the date of incurrence, and at any time and from time to time may later reclassify all or any portion of any item of Indebtedness as having been incurred under any category of permitted Indebtedness described in clauses (j), a) through (m), (n), (q), (r), (u), (w), (y), (z), (bbv) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the principal amount of above so long as 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, penalties 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 and the related refinancing transaction, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts is 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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofreclassification.
Appears in 1 contract
Sources: Credit Agreement (MTS Systems Corp)
Indebtedness. The Borrower shall will not, nor shall it and will not permit any of its Subsidiaries Subsidiary to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect suffer to exist any IndebtednessIndebtedness for Borrowed Money, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Obligations;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that accounts payable arising in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)ordinary course;
(c) [reserved]Indebtedness secured by Permitted Liens;
(d) Indebtedness arising from of (i) Borrower owing to any agreement providing for indemnificationof its Subsidiaries, adjustment of purchase price or similar obligations and (including contingent earn-out obligationsii) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior Subsidiary owing to the Closing Date Borrower or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementSubsidiary;
(e) Indebtedness in respect of the Borrower and/or any Subsidiary (i) pursuant to tendersbankers’ acceptance, statutory obligationsbank guarantee, bidsletter of credit, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds warehouse receipt or other similar obligations incurred facility entered into in the ordinary course of business and (ii) including in respect of letters of creditworkers compensation claims, bank guarantieshealth, surety bondsdisability or other employee benefits or property, performance bonds casualty or similar instruments liability insurance or self-insurance or other Indebtedness with respect to support any of the foregoing itemsreimbursement-type obligations regarding workers compensation claims);
(f) Indebtedness Guarantees of the Borrower and/or or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance any Indebtedness of Borrower or similar programsany Subsidiaries that is permitted to be incurred under this Agreement;
(g) Guarantees (i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of (or to) suppliers, customers, franchisees, lessors and licensees and (ii) otherwise constituting investments permitted hereunder;
(h) Indebtedness in respect of Capital Leases, synthetic lease obligations and purchase money obligations for fixed or capital assets provided the aggregate amount of Indebtedness under this clause (h) shall not exceed Five Million Dollars ($5,000,000) in the aggregate outstanding at any time; 20167775v10 200207.000080
(i) Indebtedness listed on Schedule 3.1.12 and any refinancings, refundings, renewals or extensions thereof; provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder;
(j) obligations (contingent or otherwise) of Borrower and/or or any Subsidiary existing or arising under any Swap Contract, hedge agreement or similar arrangement; 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, revenues, 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, hedge agreement or similar arrangement does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;
(k) deposits to secure the performance of bids, trade contracts and leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(i) unsecured additional Indebtedness and (ii) any refinancing, refunding, renewal or extension of any Indebtedness specified in subclause (i) above; provided that the aggregate amount of Indebtedness incurred and remaining outstanding pursuant to this clause (l) shall not at any time exceed Two Million Dollars ($2,000,000);
(m) unsecured Indebtedness in respect of obligations of Borrower or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of creditservices, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into provided that such obligations are incurred in the ordinary course of business;
(hn) Guarantees by the Indebtedness arising from agreements of Borrower and/or or any Subsidiary providing for indemnification, adjustment of Indebtedness purchase price or similar obligations, in each case entered into in connection with any acquisition, other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise investments or disposition permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06hereunder;
(io) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) obligations owing under incentive to pay insurance premiums or (including dealer incentive)ii) take or pay obligations contained in supply agreements, supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in each case arising in the ordinary course of business;
(lp) Indebtedness representing severance payments or deferred compensation to current or former officers, managers, consultants, directors and employees (or their respective spouses, former spouses, successors, executors, administrators, heirs, legatees or distributees) of Borrower and the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements Subsidiaries incurred in the ordinary course of business;
(mq) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Unsecured Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former directorofficers, officermanagers, employeeconsultants, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary directors and employees (or their respective Immediate Family Membersspouses, former spouses, successors, executors, administrators, 20167775v10 200207.000080 heirs, legatees or distributees) to finance the purchase or redemption of Capital Stock equity interests of any Parent Company Borrower permitted by Section 6.04(a);hereunder; and
(pr) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) cash management obligations and any subsequent Refinancing other Indebtedness in respect thereof; providedof netting services, that:
(i) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinancedautomatic clearinghouse arrangements, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties overdraft protections and premiums (including tender premiums) thereon plus underwriting discounts, other reasonable cash management 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 and the related refinancing transaction, (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 definition (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) other than similar arrangements in the case ordinary course of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofbusiness.
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Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) the Secured : Indebtedness, including Capitalized Lease Obligations (including other than Indebtedness described in Section 6.01(b) below) existing or committed on the Restatement Effective Date (provided, that any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) such Indebtedness of the Borrower that is owed to any Subsidiary and/or of any Subsidiary to person other than the Borrower and/or any other Subsidiary; providedone or more of its Subsidiaries, that in the case an aggregate amount in excess of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness $50,000,000 shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness set forth in Schedule 6.01 of the Borrower Restatement Effective Date Certificate) and any Permitted Refinancing Indebtedness incurred to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) Refinance such Indebtedness; Indebtedness created hereunder (including pursuant to an Intercompany Note);
(cSection 2.21, Section 2.22 and Section 2.23) [reserved];
(d) and under the other Loan Documents and any Refinancing Notes incurred to Refinance such Indebtedness; Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes; Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any such agreement;
(e) Indebtedness of person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower and/or or any Subsidiary (i) Subsidiary, pursuant to tendersreimbursement or indemnification obligations to such person, 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 each case in the ordinary course of business or consistent with past practice or industry practices; subject to Section 6.08, Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided, that (i) Indebtedness of any Subsidiary that is not a Loan Party owing to a Loan Party incurred pursuant to this Section 6.01(e) shall be subject to Section 6.04(b) and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Guarantor and Indebtedness of any Guarantor owing to the Borrower incurred pursuant to this Section 6.01(e) shall be subordinated in right of payment to the Loan Obligations on terms reasonably satisfactory to the Administrative Agent; Indebtedness in respect of letters of creditperformance bonds, bank guarantiesbid bonds, appeal bonds, surety bondsbonds and completion guarantees and similar obligations, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred each case provided in the ordinary course of business or consistent with past practice or industry practices, including those incurred to secure health, safety and environmental obligations in respect the ordinary course of obligations business or consistent with past practice or industry practices; Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(hi) Guarantees by Indebtedness of a Subsidiary acquired after the Borrower and/or any Subsidiary of Indebtedness Restatement Effective Date or other obligations of the Borrower, any Subsidiary and/or any joint venture a person merged or consolidated with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary after the Restatement Effective Date and Indebtedness otherwise assumed by any Loan Party in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger, amalgamation or consolidation is not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary)Agreement; provided, that that, (x) Indebtedness acquired or assumed pursuant to this subclause (h)(i) shall be in existence prior to the case respective merger or acquisition of any Guarantee by assets or Equity Interests (including a Permitted Business Acquisition) and shall not have been created in contemplation thereof or in connection therewith, and (y) after giving effect to the acquisition or assumption of such Indebtedness, (A) the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
in compliance with the Financial Covenants (jif applicable) Surety Bond Indebtedness;
and (k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (iB) the financing of insurance premiumsTotal Leverage Ratio shall not be greater than 5.00 to 1.00, in each case calculated on a Pro Forma Basis for the then most recently ended Test Period; and (ii) take-or-pay obligations contained any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness; Capitalized Lease Obligations (and any Permitted Refinancing Indebtedness in supply arrangements, in each case, in the ordinary course of business and/or (iiirespect thereof) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of (x) $52,850,000 1,500,000,000 and 35(y) 16.5% of Consolidated Adjusted Pro Forma LTM EBITDA as measured at the time of incurrence, creation or assumption (plus any increase in the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed amount thereof in connection with any acquisition refinancing, renewal or similar Investment extension thereof to the extent such increase is permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder definition of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Permitted Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Amendment Agreement (Qwest Corp)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness created hereunder and under the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)other Loan Documents;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)[Reserved];
(c) [reserved]Indebtedness of the Borrower and its Restricted Subsidiaries pursuant to Swap Agreements permitted by Section 6.12 and in respect of Secured Bilateral Letters of Credit in an amount not to exceed the Maximum Shared Amount;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Restricted Subsidiary of the Borrower, pursuant to any reimbursement or indemnification obligations to such agreementPerson; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed not later than thirty (30) days following such incurrence;
(e) Indebtedness of the Borrower and/or or any Restricted Subsidiary owing to the Borrower or any Subsidiary of the Borrower to the extent permitted by Section 6.04; provided that Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations on terms reasonably satisfactory to the Administrative Agent;
(if) pursuant to tendersIndebtedness in respect of performance bonds, statutory warranty bonds, bid bonds, appeal bonds, surety bonds, labor bonds and completion or performance guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) Indebtedness arising out of advances on exports, advances on imports, advances on trade receivables, customer prepayments and similar transactions in respect the ordinary course of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsbusiness and consistent with past practice;
(fg) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programs;
(i) guaranties by instrument drawn against insufficient funds in the Borrower and/or any Subsidiary ordinary course of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees business or other cash management services in the ordinary course of business, ; provided that (iix) such Indebtedness incurred in the ordinary course (other than credit or purchase cards) is extinguished within five (5) Business Days of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services its incurrence and (iiiy) such Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties credit or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in purchase cards is extinguished within sixty (60) days from the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06due date thereof;
(i) Indebtedness of a Restricted Subsidiary acquired after the Closing Date or a Person merged into, amalgamated or consolidated with the Borrower and/or or any Restricted Subsidiary existing, or pursuant to commitments existing, on after the Closing DateDate and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger, amalgamation or consolidation and is not created in contemplation of such event and where such acquisition, merger, amalgamation or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided, provided that any the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger, amalgamation or consolidation, such assumption or such incurrence, as applicable, would not exceed the greater of (i) U.S.$60.0 million and (ii) 2% of Consolidated Net Tangible Assets of the Borrower;
(i) Capital Lease Obligations incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in excess order to finance such acquisition, lease or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof would not exceed the greater of $5,000,000 shall be described on Schedule 6.01(i) U.S.$60.0 million and (ii) 2% of Consolidated Net Tangible Assets of the Borrower;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases Mortgage financings and purchase money Indebtedness incurred by the Borrower or any Restricted Subsidiary prior to or within 270 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition, lease or improvement, and any Permitted Refinancing Indebtedness in respect thereof, in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofof, and (ii) after giving effect to, the aggregate outstanding principal amount of such Indebtedness does incurrence thereof would not exceed the greater of $20,000,000 (i) U.S.$60.0 million and 25(ii) 2% of Consolidated Adjusted EBITDA as Net Tangible Assets of the last day of the most recently ended Test PeriodBorrower;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Credit Agreement (SemGroup Corp)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01 to the Original Credit Agreement) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(bi) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit J to the Original Credit Agreement or on substantially identical subordination terms or other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case provided in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection consistent with Cash management and Deposit Accountspast practice or industry practices, including incentivethose incurred to secure health, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the safety and environmental obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services consistent with past practice or progress payments in connection with such goods and services and industry practices;
(iiig) Indebtedness in respect arising from the honoring by a bank or other financial institution of letters of credita check, bankers’ acceptances, bank guaranties draft or similar instruments supporting trade payablesinstrument drawn against insufficient funds in the ordinary course of business or other cash management services, warehouse receipts or similar facilities entered into in each case incurred in the ordinary course of business;
(hi) Guarantees by Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower and/or or any Subsidiary of Indebtedness or other obligations of after the Borrower, any Subsidiary and/or any joint venture with respect to Closing Date and Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 or assumed by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement Agreement; provided, that, (w) in the case of any such Indebtedness secured by Liens on Collateral that are Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not prohibited greater than 2.50 to 1.00 or (II) no greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, (x) in the case of any such Indebtedness secured by Liens on Collateral that are Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 3.00 to 1.00 or (II) no greater than the Net Secured Leverage Ratio in effect immediately prior thereto, (y) in the case of any other such Indebtedness, the Interest Coverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not less than 2.00 to 1.00 or (II) no less than the Interest Coverage Ratio in effect immediately prior thereto and (z) in the case of any such Indebtedness incurred under this clause (h) by a Subsidiary other than a Subsidiary Loan Party that is incurred in contemplation of such acquisition, merger or consolidation, the aggregate outstanding principal amount of such Indebtedness immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding at such time pursuant to Section 6.01(q)(i), Section 6.01(r)(i) and Section 6.01(s)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $150,000,000 and 0.20 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, further, that the incurrence of any Indebtedness for borrowed money pursuant to this clause (h)(i) incurred in contemplation of such acquisition, merger or consolidation shall be subject to the last paragraph of this Section 6.01 and the incurrence (but not assumption) of any such term loan Indebtedness that is secured by Other First Liens shall be subject to the last paragraph of Section 6.02; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (i) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or such Subsidiary); providedany Subsidiary prior to or within 270 days after the acquisition, that in lease, construction, repair, replacement or improvement of the case respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any Guarantee person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(i), would not exceed the greater of $225,000,000 and 0.35 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, (ii) Capitalized Lease Obligations Incurred by the Borrower of the obligations of or any Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of computer equipment (including servers), storage equipment, networking equipment and other equipment and similar assets related to the business of the Borrower or and its Subsidiaries and any finance lease obligations not prohibited hereunder and (iii) any Permitted Refinancing Indebtedness in respect of any joint venture, the related Investment is permitted under Section 6.06foregoing;
(i) Capitalized Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 6.03, (ii) Capitalized Lease Obligations or other obligations or deferrals attributable to capital spending and (iii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) other Indebtedness of the Borrower and/or or any Subsidiary existingSubsidiary, or in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to commitments existingthis Section 6.01(k), would not exceed the greater of $350,000,000 and 0.475 times the EBITDA calculated on a Pro Forma Basis for the Closing Date; providedthen most recently ended Test Period, that and (ii) any such Permitted Refinancing Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businessrespect thereof;
(l) Indebtedness of the Borrower and/or or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35than 100% of Consolidated Adjusted EBITDA as the amount of net cash proceeds received by the last day Borrower from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the most recently ended Test Period;
net cash proceeds from the issuance and sale by Holdings or a Parent Entity of its Qualified Equity Interests or a contribution to its common equity (nin each case of (x) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created y), other than proceeds from the sale of Equity Interests to, or incurred in anticipation thereofcontributions from, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary of its Subsidiaries), to any stockholder of any Parent Company the extent such net cash proceeds do not constitute Excluded Contributions or any current or former director, officer, employee, member of management, manager or consultant of any Parent CompanyPermitted Cure Securities;
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock Loan Party of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the principal amount of such Indebtedness does not exceed the principal amount of the Indebtedness being refinanced, refunded Borrower or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (B) an amount equal to any existing commitments unutilized thereunder and (C) additional amounts Subsidiary Loan Party 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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of,
Appears in 1 contract
Sources: Incremental Assumption Agreement (Rackspace Technology, Inc.)
Indebtedness. The Neither the Borrower shall not, nor shall it permit any of its the Subsidiaries to, directly or indirectly, shall create, incur, assume or otherwise become or remain liable with respect suffer to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations Closing Date and set forth on Schedule 7.03 (including any Additional Term Loans excluding Indebtedness under clauses (b) and (l) of this Section 7.03) and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing of such Indebtedness (other than intercompany Indebtedness refinanced with Indebtedness owed to a Person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved]Indebtedness of the Borrower and the Subsidiaries pursuant to Swap Agreements permitted by Section 7.10;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementPerson, provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims, such obligations are reimbursed in the ordinary course of business;
(e) Indebtedness of the Borrower and/or or any Subsidiary to the extent permitted by Section 7.02, provided that Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party (ithe “Subordinated Intercompany Debt”) pursuant shall be subordinated to tendersthe Obligations on terms reasonably satisfactory to the Required Lenders;
(f) Indebtedness in respect of performance bonds, statutory warranty bonds, bid bonds, appeal bonds, surety bonds and completion or performance guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar safety and environmental obligations incurred in the ordinary course of business and (ii) Indebtedness arising out of advances on exports, advances on imports, advances on trade receivables, customer prepayments and similar transactions in respect the ordinary course of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsbusiness and consistent with past practice;
(fg) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programs;
(i) guaranties by instrument drawn against insufficient funds in the Borrower and/or any Subsidiary ordinary course of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees business or other cash management services in the ordinary course of business, provided that (x) such Indebtedness (other than credit or purchase cards) is extinguished within three (3) Business Days of its incurrence and (y) such Indebtedness in respect of credit or purchase cards is extinguished within sixty (60) days from its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a Person merged into or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case, exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement and (ii) any Permitted Refinancing of such Indebtedness, provided that the aggregate principal amount of such Indebtedness at the time of, and after giving effect to, such acquisition, merger or consolidation, such assumption or such incurrence, as applicable (together with Indebtedness outstanding pursuant to this paragraph (h), paragraph (i) of this Section 7.03 and the Remaining Present Value of outstanding leases permitted under Section 7.04), would not exceed $30,000,000;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Borrower or any Subsidiary prior to or within 180 days after the acquisition, lease or improvement of the respective asset permitted under this Agreement in order to finance such acquisition or improvement, and any Permitted Refinancing in respect thereof, in an aggregate principal amount that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (h) of this Section 7.03, this paragraph (i) and the Remaining Present Value of leases permitted under Section 7.04) would not exceed $30,000,000;
(j) Capital Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 7.04;
(k) other Indebtedness, not otherwise permitted by this Section 7.03, in an aggregate principal amount at any time outstanding pursuant to this paragraph (k) not in excess of $60,000,000;
(i) ABL Loans, (ii) any ABL Incremental Loans in an aggregate principal amount not to exceed $100,000,000 and (iii) any Permitted Refinancing of amounts incurred under the foregoing clauses (i) and (ii);
(m) Guarantees (i) by the Loan Parties of the Indebtedness of the Borrower described in paragraph (l) and (v), (ii) by any Loan Party of any Indebtedness of the Borrower or any Loan Party expressly permitted to be incurred under this Agreement, (iii) by the Borrower or any Subsidiary of Indebtedness otherwise expressly permitted hereunder of the Borrower or any Subsidiary that is not a Loan Party to the extent permitted by Section 7.02, (iv) by any Subsidiary that is not a Loan Party of Indebtedness of another Subsidiary that is not a Loan Party; provided that all Foreign Subsidiaries may guarantee obligations of other Foreign Subsidiaries under ordinary course Cash Management Obligations, and (v) by the Borrower of Indebtedness of Foreign Subsidiaries incurred for working capital purposes in the ordinary course of business in respect on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 7.03(a), (k) or (s); provided that Guarantees by any Loan Party under this Section 7.03(m) of obligations any other Indebtedness of a Person that is subordinated to other Indebtedness of such Person shall be expressly subordinated to the Obligations on terms consistent with those used, or to be used, for Subordinated Intercompany Debt;
(n) Indebtedness arising from agreements of the Borrower and/or or any Subsidiary to pay the deferred providing for indemnification, adjustment of purchase price of goods price, earn outs or services similar obligations, in each case, incurred or progress payments 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 goods and services and business, assets or a Subsidiary for the purpose of financing such acquisition;
(iiio) [Reserved];
(p) letters of credit or bank guarantees having an aggregate face amount not in excess of $60,000,000;
(q) Indebtedness in respect of letters of creditCash Management Obligations or Treasury Services Agreements, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in each case in the ordinary course of business;
(hr) Guarantees by Indebtedness consisting of Permitted Ratio Debt to the Borrower and/or any Subsidiary extent permitted at the time of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred incurrence thereof pursuant to this Section 6.01 by the Borrower or such Subsidiarydefinition thereof, as applicable, or other obligations of the Borrower and/or and any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06Permitted Refinancing thereof;
(is) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive Foreign Subsidiaries (including dealer incentive), supply, distribution, resale, vendor, license, sublicense letters of credit or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, bank guarantees for working capital purposes incurred in the ordinary course of business and/or (iii) obligations on ordinary business terms in an aggregate amount not to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of businessexceed $10,000,000 outstanding at any time;
(mt) Indebtedness of the Borrower and/or any Subsidiary with and its Subsidiaries in respect to Capital Leases of factoring of receivables from a foreign customer held by the Borrower and purchase money Indebtedness its Subsidiaries in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;5,000,000 at any time; and
(nu) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that all premium (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (aif any), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties and premiums interest (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 and the related refinancing transaction, (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 definition (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 6.02post-petition interest),
(ii) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiumsexpenses, rate floors, optional prepayment, redemption terms charges and additional or subordination terms and, with respect to Refinancing Indebtedness incurred contingent interest on obligations described in respect of Indebtedness permitted under clause paragraphs (a) above, security), are not, taken as a whole through (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1t) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of.
Appears in 1 contract
Indebtedness. The Borrower shall notIncur, nor shall it create, assume or permit any of its Subsidiaries toto exist, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) Indebtedness incurred under this Agreement and the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)other Loan Documents;
(b) Indebtedness of outstanding on the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; providedClosing Date and listed on Schedule 6.01(b), that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Permitted Refinancings thereof;
(c) [reservedReserved];
(d) Indebtedness arising from any agreement providing for indemnificationpermitted by Section 6.04(e), adjustment of purchase price (h) or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreementi);
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters Purchase Money Obligations and Capital Lease Obligations and Attributable Indebtedness in respect of creditSale and Leaseback Transactions, bank guaranties, surety bonds, performance bonds or similar instruments in an aggregate amount under this clause (e) not to support exceed $25,000,000 at any of the foregoing itemstime outstanding;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and Deposit Accounts, including incentive, supplier finance bankers acceptances issued for the account of Holdings or similar programs;
(i) guaranties by the Borrower and/or any Restricted Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, including guarantees or obligations of Holdings or any Restricted Subsidiary with respect to letters of credit supporting such bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed);
(g) Contingent Obligations of (i) any Loan Party in respect of Indebtedness otherwise permitted under this Section 6.01 and (ii) any Restricted Subsidiary in respect of Indebtedness incurred in an aggregate amount not to exceed $50,000,000 at any time outstanding;
(h) 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 in respect business; provided, however, that such Indebtedness is extinguished within five Business Days of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments incurrence;
(i) Indebtedness arising in connection with such goods and services and (iii) Indebtedness in respect endorsement of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into for deposit in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(ij) Indebtedness of Holdings and its Restricted Subsidiaries in an aggregate principal amount not to exceed $50,000,000 at any time outstanding; provided that, if at the Borrower and/or time of incurrence of any Subsidiary existingIndebtedness under this clause (j), or pursuant the Total Leverage Ratio for the Test Period then last ended (determined on a Pro Forma Basis after giving effect to commitments existingsuch incurrence of Indebtedness) is less than 3.25 to 1.00, on then the Closing Date; provided, that any such basket for the incurrence of Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
under this clause (j) Surety Bond shall be increased to $100,000,000 solely in respect of the incurrence of such Indebtedness;
(k) Indebtedness Holdings and its Restricted Subsidiaries may become and remain liable with respect to customary indemnification and purchase price adjustment obligations incurred in connection with Asset Sales or other sales of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businessassets;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing DatePermitted Acquisition; provided, provided that (i) such Indebtedness (A) existed at the time was not incurred in contemplation of such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and Permitted Acquisition, (B) was is secured only by the assets acquired in the applicable Permitted Acquisition (including any acquired Equity Interests) and (C) the only obligors with respect to any Indebtedness incurred pursuant to this clause (l) shall be those persons who were obligors of such Indebtedness prior to such Permitted Acquisition, (ii) both immediately prior to and after giving effect thereto no Default shall exist or result therefrom and (iii) Holdings shall be in compliance on a Pro Forma Basis after giving effect to the assumption of such Indebtedness with each of the covenants set forth in Section 6.09 for the Test Period then last ended; provided that, if the Indebtedness so assumed is not created or incurred subordinated in anticipation thereofpayment to the Obligations on terms reasonably satisfactory to the Administrative Agent, then, with respect to determining compliance with the covenant set forth in Section 6.09(a) for purposes of this clause (l), the then-current covenant level reflected in Section 6.09(a) shall be reduced by 0.25 to 1.00;
(m) Indebtedness under Permitted Senior Notes and Permitted Subordinated Notes, the Net Cash Proceeds of which are applied to prepay Loans pursuant to Section 2.12(d) and (ii) Permitted Refinancings thereof; provided that (x) both immediately prior to and after giving effect thereto no Default shall exist or result therefrom and (y) Holdings shall be in compliance on a Pro Forma Basis after giving effect to the aggregate outstanding principal amount incurrence of such Indebtedness does not exceed (and the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as use of the last day proceeds thereof) with each of the most recently ended covenants set forth in Section 6.09 for the Test PeriodPeriod then last ended;
(n) Indebtedness under Permitted Subordinated Notes and Permitted Refinancings thereof; provided that (i) both immediately prior to and after giving effect thereto no Default shall exist or result therefrom and (ii) in the case of the initial incurrence thereof (but not any Permitted Refinancings), Holdings shall be in compliance on a Pro Forma Basis after giving effect to the incurrence of such Indebtedness (and the use of the proceeds thereof) with each of the covenants set forth in Section 6.09 for the Test Period then last ended;
(o) Indebtedness consisting under Permitted Senior Notes and Permitted Refinancings thereof; provided that (i) both immediately prior to and after giving effect thereto no Default shall exist or result therefrom and (ii) in the case of promissory notes issued by the Borrower or initial incurrence thereof (but not any Subsidiary Permitted Refinancings), Holdings shall be in compliance on a Pro Forma Basis after giving effect to any stockholder the incurrence of any Parent Company or any current or former directorsuch Indebtedness (and the use of the proceeds thereof) with each of the covenants set forth in Section 6.09 for the Test Period then last ended (provided that, officer, employee, member with respect to determining compliance with the covenant set forth in Section 6.09(a) for purposes of management, manager or consultant of any Parent Companythis clause (o), the Borrower or any Subsidiary (or their respective Immediate Family Membersthen-current covenant level reflected in Section 6.09(a) shall be reduced by 0.25 to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a1.00);; and
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder Restricted Subsidiaries that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date not Guarantors in an outstanding aggregate principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of $50,000,000 at any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds oftime outstanding.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect cause to exist any Indebtedness, except:
(a) (i) Indebtedness existing on the Secured Obligations Closing Date (including provided that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $3,000,000 individually or in excess of $10,000,000 in the aggregate shall be set forth on Schedule 6.01), and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Parent Borrower or any Subsidiary);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.19) and under the other Loan Documents;
(c) [reserved]Indebtedness of the Parent Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations owed to (including contingent earn-out obligations) incurred obligations in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase respect of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, credit or bank guaranties, surety bonds, performance bonds guarantees or similar instruments securing for the performance of benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Parent Borrower or any Subsidiary Subsidiary, pursuant to any reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business;
(e) Indebtedness of the Parent Borrower and/or to any Subsidiary and of any Subsidiary to the Parent Borrower or any other Subsidiary; provided that (i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04 and (ii) such Indebtedness shall be subordinated to the Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit J or on substantially identical subordination terms or on other subordination terms reasonably satisfactory to the Administrative Agent (at the direction of the Required Lenders) and the Borrowers;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations incurred instrument drawn against insufficient funds in the ordinary course of business or other cash management services, in each case entered into in the ordinary course of business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date (including any Exempted Subsidiary at such time as it becomes a Subsidiary) or a person merged, amalgamated or consolidated with the Parent Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise assumed by the Parent Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition, merger, amalgamation or consolidation), where such acquisition, merger, amalgamation or consolidation is not prohibited by this Agreement and such Indebtedness was not incurred in contemplation of such acquisition, merger, amalgamation or consolidation and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (A) Indebtedness in respect of retail store lease obligations and (B) Capitalized Lease Obligations and other Indebtedness incurred by the Parent Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, installation, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, installation, repair, replacement or improvement, in an aggregate outstanding principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(B), would not exceed the greater of (x) $75,000,000 and (y) 1.50% of Consolidated Total Assets;
(i) Capitalized Lease Obligations and any other Indebtedness incurred by the Parent Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(j), would not exceed the greater of (x) $100,000,000 and (y) 2.00% of Consolidated Total Assets and (ii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(k) Indebtedness of the Parent Borrower or any Subsidiary, in an aggregate outstanding principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of (x) $50,000,000 and (y) 1.00% of Consolidated Total Assets; provided, further, that any such Indebtedness incurred by a Subsidiary that is not a Subsidiary Loan Party, together with any Indebtedness incurred by a Subsidiary that is not a Subsidiary Loan Party pursuant to Section 6.01(x) or 6.01(aa), does not exceed at any time outstanding the greater of (x) $100,000,000 and (y) 2.00% of Consolidated Total Assets;
(i) Indebtedness of the Parent Borrower or any Subsidiary in an aggregate outstanding principal amount, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(l), not greater than 100% of the amount of net cash proceeds received by the Parent Borrower from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the net cash proceeds from the issuance and sale by a Parent Entity of its Qualified Equity Interests or a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the Parent Borrower or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions or increase the Cumulative Credit, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(m) Guarantees (i) by the Parent Borrower or any Subsidiary Loan Party of any Indebtedness of the Parent Borrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (ii) by the Parent Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 and (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party; provided that Guarantees by the Parent Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Parent Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement or a transaction consummated prior to the Closing Date;
(o) Indebtedness in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds warehouse receipts or similar instruments issued to support any performance obligations and trade letters of the foregoing items;
credit (f) Indebtedness of the Borrower and/or any Subsidiary other than obligations in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(iother Indebtedness) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business;
(i) Indebtedness of the Parent Borrower and the Subsidiary Loan Parties in an aggregate principal amount not to exceed at the time of incurrence the Incremental Amount available at such time; provided that (A) the incurrence of any Indebtedness pursuant to this clause (p)(i) shall be subject to the requirements applicable to Incremental Term Loans (with all references therein to “Incremental Term Loans” deemed a reference instead to “Pari Debt”) set forth in Sections 2.19(b)(iii) (other than with respect to bona fide revolving credit facilities), (iv) (other than with respect to bona fide revolving credit facilities), (vi), (vii) (other than with respect to bona fide revolving credit facilities) and (viii), (B) the incurrence of any Indebtedness for borrowed money in the form of (x) term loans, (y) bonds or (z) revolving credit facilities in an aggregate committed amount in excess of $250,000,000, in each case incurred within twenty-four (24) months of the Closing Date that are secured by Liens on the Collateral that are Other First Liens shall be subject to the MFN Protection (with all references therein to “Incremental Term Loans” deemed a reference instead to “Pari Debt”) and (C)(i) in the case of such Indebtedness secured by Liens on the Collateral that are (or are intended to be) junior in priority to the Liens on the Collateral securing the Obligations, such Liens shall be subject to a Permitted Junior Intercreditor Agreement and (ii) in the case of such Indebtedness secured by Liens on the Collateral that are (or are intended to be) pari passu with the Liens on the Collateral securing the Obligations, such Liens shall be subject to a Permitted Pari Passu Intercreditor Agreement; and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(q) Indebtedness incurred in the ordinary course of business in respect of obligations of the Parent Borrower and/or or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services 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 or any Hedging Agreements;
(iiir) Indebtedness in respect representing deferred compensation to employees, consultants or independent contractors of letters of creditthe Parent Borrower (or, bankers’ acceptancesto the extent such work is done for the Parent Borrower or its Subsidiaries, bank guaranties any direct or similar instruments supporting trade payables, warehouse receipts indirect parent thereof) or similar facilities entered into any Subsidiary incurred in the ordinary course of business;
(hs) Guarantees by the Borrower and/or any Subsidiary obligations in respect of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be Cash Management Agreements incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(lt) [reserved];
(u) Indebtedness issued by the Parent Borrower or any Subsidiary to current or former officers, directors and employees thereof or any Parent Entity, their respective estates, spouses or former spouses to finance the purchase or redemption of Equity Interests of the Parent Borrower or any Parent Entity permitted by Section 6.06;
(v) Indebtedness of the Parent Borrower and/or or any Subsidiary to or on behalf of any joint venture (regardless of the form of legal entity) that is not a Subsidiary arising in the ordinary course of business in connection with the cash management operations (including with respect to intercompany self-insurance arrangements) of the Parent Borrower and its Subsidiaries;
(w) Indebtedness consisting of (i) the financing of insurance premiums, premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(mx) Indebtedness of the Borrower and/or any Subsidiaries that are not Subsidiary with respect to Capital Leases and purchase money Indebtedness Loan Parties in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder outstanding that, immediately after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect theretothe use of proceeds thereof, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu together with the Initial Term Loans hereunder in right aggregate principal amount of payment and secured by any other Indebtedness outstanding pursuant to this Section 6.01(x), would not exceed the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in greater of (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) $50,000,000 and (y) any mandatory prepayment 1.00% of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto Consolidated Total Assets on a Pro Forma Basis as of for the last day of the then most recently ended Test Period; provided, including the application of the proceeds thereof (in each casefurther, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of that any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such together with any Indebtedness is secured incurred by a Lien on the Collateral Subsidiary that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on not a First Priority Lien basisSubsidiary Loan Party pursuant to Section 6.01(k) or 6.01(aa), the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on at any time outstanding the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds greater of
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become or remain liable with suffer to exist any Indebtedness (exclusive of trade debt) except in respect to any Indebtedness, except:
of (a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
Obligations; (b) Indebtedness Capitalized Lease Obligations consisting of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness Capital Lease of the Borrower wet sand plant located in ▇▇▇▇▇▇ County, Wisconsin plus additional Capitalized Lease Obligations in an aggregate amount at any time outstanding not to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
exceed $5,000,000; (c) [reserved];
Permitted Purchase Money Indebtedness; (d) Indebtedness arising from under any agreement providing for indemnification, adjustment of purchase price or similar obligations Hedge so long as such Indebtedness (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior except to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
extent constituting Hedge Liabilities) is unsecured; (e) Indebtedness of the Borrower and/or owing to any other Credit Party or Subsidiary (i) thereof so long as any such Indebtedness owing to any Person that is not a Credit Party is subordinated pursuant to tendersan agreement reasonably satisfactory to Agent; (f) guarantees permitted under Section 7.3; (g) to the extent not otherwise described in this Section 7.8, statutory Indebtedness set forth on Schedule 7.8 and any Refinancing Indebtedness in respect thereof; (h) Indebtedness in respect of workers’ compensation claims, property casualty or liability insurance, and self-insurance obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds or other similar obligations incurred in each case in the ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
business; (i) guaranties Indebtedness arising from the honoring by the Borrower and/or any Subsidiary a bank or other financial institution of the obligations of suppliersa check, distributors, resellers, customers, licensees and sublicensees draft or similar instrument drawn against insufficient funds in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(ij) Indebtedness of the Borrower and/or Parent Guarantor or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (iik) take-or-pay obligations contained in supply arrangementsIndebtedness arising from agreements of the Parent Guarantor or any Restricted Subsidiaries providing for indemnification, adjustment of purchase price, earnouts or similar obligations, in each case, incurred or assumed in connection with a Disposition permitted under Section 7.1(b) or a Permitted Acquisition, (l) Indebtedness of the Parent Guarantor or any Restricted Subsidiary in connection with 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 Guarantor or a Restricted Subsidiary in the ordinary course of business and/or (iii) or pursuant to self-insurance obligations to reacquire assets or inventory and in each case not in connection with customer financing arrangements in the ordinary course borrowing of business;
money or the obtaining of advances and (m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money unsecured Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of 50,000,000 at any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i)aggregate, (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken so long as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors on terms and conditions satisfactory to Agent in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofits Permitted Discretion.
Appears in 1 contract
Sources: Revolving Credit and Security Agreement (Emerge Energy Services LP)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or suffer to exist or otherwise become or remain liable with in respect to of any Indebtedness, exceptother than:
(a) Indebtedness incurred prior to the Secured Obligations (including any Additional Term Loans date hereof as described on Schedule II attached hereto and any Additional Opco Revolving Facility Repayment Term Loans)refinancings, refundings, renewals or extensions thereof with Indebtedness of a similar type that does not increase the outstanding principal amount thereof;
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; providedfor trade payables, that in the case of any Indebtedness of any Subsidiary owing to the Borroweraccrued taxes and expenses, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note);
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (i) pursuant to tenders, statutory obligations, bids, leases, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return of money bonds liabilities or other similar obligations incurred in the ordinary course of business business; provided that, such payables, taxes, expenses, liabilities, or other obligations are not greater than ninety (90) days past the date of invoice or delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with Generally Accepted Accounting Principles;
(iic) in respect Indebtedness consisting of letters guarantees permitted pursuant to Section 7.03;
(d) Subordinated Indebtedness; provided, however, that no Default or Event of creditDefault shall have occurred and be continuing or would occur after giving effect to the incurrence of such Subordinated Indebtedness;
(e) Indebtedness secured by purchase money liens; provided that, bank guaranties, surety bonds, performance bonds or similar instruments to support the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $5,000,000 at any of the foregoing itemstime outstanding;
(f) Indebtedness of owing by the Borrower and/or Company to any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance Guarantor or similar programsfrom any Guarantor to the Company or any other Guarantor;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (iig) Indebtedness constituting insurance premiums to Persons 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 in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess respect of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness performance bonds, bid bonds, appeal bonds, surety bonds, performance and completion guarantees and similar obligations, and obligations in respect of the Borrower and/or any Subsidiary consisting letters of obligations owing under incentive (including dealer incentive)credit, supply, distribution, resale, vendor, license, sublicense bank guarantees or similar agreements entered into instruments related thereto, in each case provided in the ordinary course of business; provided that, the aggregate principal amount of Indebtedness permitted by this clause (h) shall not exceed $5,000,000 at any time outstanding;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary Guarantor after the date hereof and Indebtedness incurred or Indebtedness assumed in connection with a Permitted Acquisition and extensions, refinancings, refundings, replacements and renewals of any acquisition or similar Investment permitted hereunder after the Closing Datesuch Indebtedness; provided, provided that (i) such Indebtedness (A) existed exists at the time such Person became becomes a Subsidiary Guarantor or at the assets subject to time of such Indebtedness were acquired Permitted Acquisition, as applicable, and (B) was is not created in contemplation of or incurred in anticipation thereofconnection with such Person becoming a Guarantor or such Permitted Acquisition, as applicable, and (ii) the aggregate outstanding principal amount of such Indebtedness does permitted by this clause (i) shall not exceed $5,000,000 at any time outstanding;
(j) Indebtedness under Hedging Agreements permitted hereunder;
(k) cash management obligations and other Indebtedness in respect of netting services, overdraft protections and similar arrangements in each case arising in the greater ordinary course of business in connection with deposit accounts;
(l) the Secured Obligations;
(m) Indebtedness owing by the Company to the IRB in connection with the IRB Transaction, in an amount not to exceed $20,000,000 1,400,000;
(n) forward buys of resin entered into by the Company or any Guarantor in the ordinary course of business and 25% not for purposes of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;speculation; and
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing other unsecured Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding aggregate principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of exceeding $10,000,000 at any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds oftime outstanding.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01), and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany NoteSection 2.21 (whether prior to, on or after the Ninth Incremental Assumption and Amendment Agreement Effective Date)) and under the other Loan Documents, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of the Borrower and/or to Holdings or any Subsidiary and of any Subsidiary to Holdings, the Borrower or any other Subsidiary; provided, that (i) Indebtedness of any Subsidiary that is not a Subsidiary Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04 and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party incurred pursuant to this Section 6.01(e) shall be subordinated to the Loan Obligations under this Agreement on subordination terms described in the intercompany note substantially in the form of Exhibit I hereto or on other subordination terms reasonably satisfactory to the Administrative Agent and the Borrower;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry practices, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in the ordinary course of business or other cash management services, in each case incurred in the ordinary course of business business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition), where such acquisition, merger or consolidation is not prohibited by this Agreement; provided, that, (w) in the case of any such Indebtedness secured by Liens on Collateral that are Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 3.20 to 1.00 or (II) not greater than the Net First Lien Leverage Ratio in effect immediately prior thereto, (x) in the case of any such Indebtedness secured by Liens on Collateral that are Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not greater than 3.60 to 1.00 or (II) not greater than the Net Secured Leverage Ratio in effect immediately prior thereto, (y) in the case of any other such Indebtedness, the Interest Coverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is (I) not less than 2.00 to 1.00 or (II) not less than the Interest Coverage Ratio in effect immediately prior thereto and (z) in the case of any such Indebtedness incurred under this clause (h) by a Subsidiary other than a Subsidiary Loan Party, the aggregate outstanding principal amount of such Indebtedness immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions shall not exceed the greater of $350,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, further, that the incurrence (but not assumption) of term loan Indebtedness pursuant to clause (i)(w) above shall be subject to the last paragraph of Section 6.02; and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (x) Capitalized Lease Obligations, mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(x), would not exceed the greater of $250,000,000 and 0.075 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (y) any Permitted Refinancing Indebtedness in respect thereof;
(i) Capitalized Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 6.03, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) other Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $350,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(l) Indebtedness of the Borrower or any Subsidiaries in an aggregate outstanding principal amount not greater than 100% of the net cash proceeds received by the Borrower after the Closing Date from (x) the issuance or sale of its Qualified Equity Interests or (y) a contribution to its common equity with the net cash proceeds from the issuance and sale by Holdings or a Parent Entity of its Qualified Equity Interests or a contribution to its common equity (in each case of (x) and (y), other than proceeds from the sale of Equity Interests to, or contributions from, the Borrower or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions;
(m) Guarantees (i) by Holdings, the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party permitted to be incurred under this Agreement, (ii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)), (iii) by any Subsidiary that is not a Subsidiary Loan Party of Indebtedness of another Subsidiary that is not a Subsidiary Loan Party, and (iv) by the Borrower of Indebtedness of Subsidiaries that are not Subsidiary Loan Parties incurred for working capital purposes in the ordinary course of business on ordinary business terms so long as such Indebtedness is permitted to be incurred under Section 6.01(t) to the extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)); provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated;
(n) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations (including earn-outs), in each case, incurred or assumed in connection with the 2015 Transactions, the ADT Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(o) Indebtedness in respect of letters of credit, bank guarantiesguarantees, surety bonds, performance bonds warehouse receipts or similar instruments issued to support any performance obligations and trade letters of credit (other than obligations in respect of other Indebtedness) in the foregoing itemsordinary course of business or consistent with past practice or industry practices;
(fp) (i) Indebtedness, including Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise the Second Priority Senior Secured Notes, in connection with Cash management an aggregate principal amount outstanding pursuant to this Section 6.01(p) not to exceed $1,246,000,000 and Deposit Accounts, including incentive, supplier finance or similar programs(ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) guaranties Indebtedness secured by Liens on Collateral that are Other First Liens so long as immediately after giving effect to the Borrower and/or incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 3.20 to 1.00; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (q)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(q)(i), Section 6.01(r)(i) and Section 6.01(s)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $475,000,000 and 0.17 times the obligations EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of suppliersterm loan Indebtedness pursuant to this clause (q)(i) shall be subject to the last paragraph of Section 6.01 and the last paragraph of Section 6.02, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) any Permitted Refinancing Indebtedness in respect thereof;
(r) (i) Indebtedness secured by Liens on Collateral that are Junior Liens so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Net Secured Leverage Ratio on a Pro Forma Basis is not greater than 3.60 to 1.00; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (r)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(q)(i), this Section 6.01(r)(i) and Section 6.01(s)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $475,000,000 and 0.17 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any term loan Indebtedness pursuant to this clause (r)(i) shall be subject to the last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) unsecured Indebtedness so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, the Interest Coverage Ratio on a Pro Forma Basis is not less than 2.00 to 1.00; provided that (x) the aggregate principal amount of Indebtedness outstanding under this clause (s)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(q)(i), Section 6.01(r)(i) and this Section 6.01(s)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $475,000,000 and 0.17 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any term loan Indebtedness pursuant to this clause (s)(i) shall be subject to the last paragraph of this Section 6.01, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness of Subsidiaries that are not Subsidiary Loan Parties in an aggregate principal amount outstanding that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(t), would not exceed the greater of $350,000,000 and 0.12 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(u) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services 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 or any Hedging Agreements;
(iiiv) Indebtedness representing deferred compensation to employees, consultants or independent contractors of the Borrower (or, to the extent such work is done for the Borrower or its Subsidiaries, any direct or indirect parent thereof) or any Subsidiary incurred in the ordinary course of business;
(w) Indebtedness in connection with Permitted Securitization Financings;
(x) obligations in respect of letters Cash Management Agreements;
(i) Refinancing Notes and (ii) any Permitted Refinancing Indebtedness incurred in respect thereof;
(i) Indebtedness in an aggregate principal amount outstanding not to exceed the Incremental Amount available at the applicable time of creditdetermination set forth in the definition thereof; provided that the incurrence of term loan Indebtedness pursuant to this clause (z)(i) shall be subject to the last paragraph of Section 6.02, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities and (ii) any Permitted Refinancing Indebtedness in respect thereof;
(aa) Guarantees of Indebtedness under customer financing lines of credit entered into in the ordinary course of business;
(hi) Indebtedness of, incurred on behalf of, or representing Guarantees by the Borrower and/or any Subsidiary of Indebtedness or of, joint ventures in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred outstanding pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive6.01(bb), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does would not exceed the greater of $20,000,000 150,000,000 and 25% of Consolidated Adjusted 0.05 times the EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto calculated on a Pro Forma Basis as of for the last day of the then most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such any Permitted Refinancing Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Incremental Assumption and Amendment Agreement (ADT Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectly, createCreate, incur, assume or otherwise become permit to exist any Indebtedness, except for:
a. Indebtedness and other Obligations created hereunder (including any Indebtedness incurred pursuant to Section 2.3);
b. Indebtedness of PG&E Utility and any of its Significant Subsidiaries, in each case, to the extent not prohibited by the PG&E Utility Revolving Credit Agreement; provided that, no Guarantee Obligations by PG&E Utility or remain liable any of its Significant Subsidiaries, in each case, with respect to any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any constituting debt for borrowed money or evidenced by notes, bonds, debentures or other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness similar instruments shall be permitted as an Investment under Section 6.06; providedexcept to the extent provided by a Person that is, furtheror concurrently with providing such Guarantee Obligations becomes, that any a guarantor of the Obligations hereunder on terms and pursuant to documentation reasonably satisfactory to the Administrative Agent;
c. Indebtedness of the Borrower outstanding on the Effective Date in an aggregate outstanding principal amount not to any Subsidiary must be unsecured and expressly subordinated exceed $4,750,000,000 that is (i) unsecured, (ii) secured only by Liens on the Collateral that are junior to the Liens securing the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)intercreditor agreement reasonably satisfactory to the Collateral Agent or (iii) secured by Liens that rank equally and ratably with the Liens securing the Obligations and that are subject to the Pledge Agreement, and any Permitted Refinancing thereof;
(c) [reserved];d. Indebtedness
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments and reimbursement obligations to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of Guarantee Obligations with respect to the obligations of suppliers, distributors, resellers, customers, customers and licensees and sublicensees other third parties in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business, workers compensation claims or other employee benefits;
(h) Guarantees by the Borrower and/or any Subsidiary f. Guarantee Obligations of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture PG&E Utility and its Significant Subsidiaries with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or 7.1; provided that, no such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited Guarantee Obligations with respect to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existingconstituting debt for borrowed money or evidenced by notes, bonds, debentures or other similar instruments shall be permitted except to the extent provided by a Person that is, or concurrently with providing such Guarantee Obligations becomes, a guarantor of the Obligations hereunder on terms and pursuant to commitments existing, on documentation reasonably satisfactory to the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01Administrative Agent;
(j) Surety Bond Indebtedness;
(k) g. Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, premiums and/or (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) h. Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases Lease Obligations and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person Indebtedness; provided that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Capital Lease Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by exceed $10,000,000 at any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii)one time;
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Indebtedness. The Borrower shall will not, nor shall it and will not permit any of its Subsidiaries Subsidiary to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) the Secured Obligations Obligations;
(including any Additional Term Loans b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term Loansrefinancing, extensions, renewals or replacements of any such Indebtedness that does not increase the outstanding principal amount thereof (other than with respect to unpaid accrued interest and premium thereon, any committed or undrawn amounts and underwriting discounts, fees, commissions and expenses, associated with such Indebtedness);
(bc) Indebtedness under the 2008 Subordinated Convertible Notes and any Permitted Refinancing Indebtedness in respect thereof;
(d) Indebtedness of the Borrower to any Subsidiary and/or and of any Subsidiary to the Borrower and/or or any other Subsidiary; provided, provided that in the case of any Indebtedness of any Subsidiary owing that is not a Loan Party to any Loan Party shall be subject to the Borrowerlimitations set forth in Section 6.04(d);
(e) Guarantees by the Borrower or any Subsidiary of Indebtedness or other obligations of the Borrower or any Subsidiary; provided that the aggregate amount of Indebtedness and other payment obligations (other than in respect of any overdrafts and related liabilities arising in the ordinary course of business from treasury, such Indebtedness depository and cash management services or in connection with any automated clearing-house transfer of funds) of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party shall be permitted as an Investment under subject to the limitations set forth in Section 6.06; provided, further, that any 6.04(d);
(f) Indebtedness of the Borrower to or any Subsidiary must be unsecured incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations, Synthetic Lease Obligations and expressly subordinated any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the Obligations acquisition thereof, and any refinancing, extensions, renewals or replacements of any such Indebtedness; provided that (i) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness incurred under this clause (f) shall not exceed immediately after giving effect to the issuance or incurrence of such Indebtedness the greater of (x) $40,000,000 and (y) 10% of Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending as of the last day of the most recent fiscal quarter for which Financials have been delivered;
(g) Indebtedness of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction or any Subsidiary as an account party in respect of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)trade letters of credit;
(ch) [reserved]Indebtedness owed in respect of any netting services, overdrafts and related liabilities arising from treasury, depository and cash management services or in connection with any automated clearing-house transfers of funds;
(di) Indebtedness under bid bonds, performance bonds, surety bonds and similar obligations, in each case, incurred by the Borrower or any of its Subsidiaries in the ordinary course of business, including guarantees or obligations with respect to letters of credit supporting such bid bonds, performance bonds, surety bonds and similar obligations;
(j) Swap Agreements permitted under Section 6.05;
(k) Indebtedness of Foreign Subsidiaries, and guarantees thereof by Foreign Subsidiaries, in respect of local lines of credit, letters of credit, bank guarantees and similar extensions of credit, in an aggregate principal amount not to exceed immediately after giving effect to the issuance or incurrence of such Indebtedness the greater of (x) $20,000,000 and (y) 5% of Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending as of the last day of the most recent fiscal quarter for which Financials have been delivered;
(l) Guarantees of Indebtedness of directors, officers, employees, agents and advisors of the Borrower or any of its Subsidiaries in respect of expenses of such Persons in connection with relocations and other ordinary course of business purposes, if the aggregate amount of Indebtedness so guaranteed, when added to the aggregate amount of unreimbursed payments theretofore made in respect of such guarantees and the amount of loans and advances then outstanding under Section 6.04(t), shall not at any time exceed $5,000,000;
(m) Indebtedness arising from any agreement agreements providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, bonds or performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary of its Subsidiaries pursuant to any such agreementagreements, in connection with Permitted Acquisitions or permitted dispositions;
(en) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into representing installment insurance premiums owing in the ordinary course of business;
(ho) Guarantees by Indebtedness representing deferred compensation, severance, pension, and health and welfare retirement benefits or the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect equivalent to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations current and former employees of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be its Subsidiaries incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be described on Schedule 6.01;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in existing on the ordinary course of businessEffective Date;
(mp) unsecured Indebtedness arising out of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in judgments not constituting an aggregate outstanding principal amount not to exceed the greater Event of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test PeriodDefault;
(nq) Indebtedness of any Person that becomes a Subsidiary (or of any Person not previously a Subsidiary that is merged or consolidated with or into a Subsidiary in a transaction permitted hereunder) after the date hereof, or Indebtedness of any Person that is assumed by any Subsidiary in connection with an acquisition of assets by such Subsidiary in a Permitted Acquisition, and any acquisition refinancing, renewal, extension or similar Investment permitted hereunder after the Closing Datereplacement in respect thereof; provided, provided that (iA) such Indebtedness (A) existed exists at the time such Person became becomes a Subsidiary (or the is so merged or consolidated) or such assets subject to are acquired and is not created in contemplation of or in connection with such Indebtedness were Person becoming a Subsidiary (or such merger or consolidation) or such assets being acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by neither the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or nor any Subsidiary (other than such Person or their respective Immediate Family Membersthe Subsidiary with which such Person is merged or consolidated or that so assumes such Person’s Indebtedness) to finance shall Guarantee or otherwise become liable for the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
(i) the principal amount payment 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (Indebtedness; and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds of
Appears in 1 contract
Sources: Credit Agreement (Endo Pharmaceuticals Holdings Inc)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) Indebtedness existing on the Secured Obligations (including any Additional Term Loans Amendment Effective Date and set forth on Schedule 6.01 and any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) Indebtedness of created hereunder and under the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)Loan Documents;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Swap Agreements permitted by Section 6.13;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson; provided that upon the incurrence of Indebtedness with respect to reimbursement obligations regarding workers' compensation claims, such obligations are reimbursed not later than 30 days following such incurrence;
(e) Indebtedness of the Borrower and/or to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that (i) pursuant Indebtedness of any Subsidiary that is not a Subsidiary Loan Party 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 ordinary course of business any Loan Party shall be subject to Section 6.04(b) and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any Indebtedness of the foregoing itemsBorrower to any Subsidiary and Indebtedness of any other Loan Party to any Subsidiary that is not a Subsidiary Loan Party shall be subordinated to the Obligations;
(f) Indebtedness of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise performance bonds, bid bonds, appeal bonds, surety bonds, financial assurances and completion guarantees and similar obligations, in connection with Cash management and Deposit Accounts, including incentive, supplier finance or similar programs;
(i) guaranties by the Borrower and/or any Subsidiary of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees each case provided in the ordinary course of business, (ii) Indebtedness including those incurred in the ordinary course of business in respect of to secure health, safety and environmental obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(hg) Guarantees Indebtedness arising from the honoring by the Borrower and/or any Subsidiary of Indebtedness a bank or other obligations financial institution of a check, draft or similar instrument drawn against insufficient funds in the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, ordinary course of business or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that cash management services in the case ordinary course of any Guarantee by the Borrower business; provided that (x) such Indebtedness (other than credit or purchase cards) is extinguished within five Business Days of the obligations its incurrence and (y) such Indebtedness in respect of any Subsidiary credit or purchase cards is extinguished within 60 days of the Borrower or of any joint venture, the related Investment is permitted under Section 6.06its incurrence;
(i) Indebtedness of a Subsidiary acquired after the Amendment Effective Date or a corporation merged into or consolidated with the Borrower and/or or any Subsidiary existingafter the Amendment Effective Date and Indebtedness assumed in connection with the acquisition of assets, which Indebtedness in each case exists at the time of such acquisition, merger or consolidation and is not created in contemplation of such event and where such acquisition, merger or consolidation is permitted by this Agreement, and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness; provided that the aggregate principal amount of such Indebtedness incurred since the Amendment Effective Date at the time of, and after giving effect to, such acquisition, merger or consolidation, such assumption or such incurrence, as applicable (together with Indebtedness outstanding pursuant to commitments existingthis paragraph (h) and paragraph (i) of this Section 6.01), would not exceed the greater of $50.0 million and 4.25% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition, merger or consolidation, such assumption or such incurrence, as applicable, for which financial statements have been delivered pursuant to Section 5.04, determined on a Pro Forma Basis;
(i) Capital Lease Obligations, mortgage financings and purchase money Indebtedness incurred by the Closing Date; providedBorrower or any Subsidiary prior to or within 270 days after the acquisition, that lease or improvement of the applicable asset permitted under this Agreement in order to finance such acquisition or improvement, and any such Permitted Refinancing Indebtedness in excess respect thereof, in an aggregate principal amount incurred since the Amendment Effective Date that at the time of, and after giving effect to, the incurrence thereof (together with Indebtedness outstanding pursuant to paragraph (h) of this Section 6.01 and this paragraph (i)) would not exceed the greater of $5,000,000 shall be described 50.0 million and 4.25% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, determined on Schedule 6.01a Pro Forma Basis;
(j) Surety Bond IndebtednessCapital Lease Obligations incurred by the Borrower or any Subsidiary in respect of any Sale and Lease-Back Transaction that is permitted under Section 6.03;
(k) other Indebtedness of the Borrower and/or or any Subsidiary consisting Subsidiary, in an aggregate principal amount incurred since the Amendment Effective Date that at the time of, and after giving effect to, the incurrence thereof, would not exceed the greater of obligations owing under incentive (including dealer incentive)$50.0 million and 4.25% of Consolidated Total Assets as of the end of the fiscal quarter immediately prior to the date of such incurrence for which financial statements have been delivered pursuant to Section 5.04, supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of businessat any time;
(l) Guarantees (i) by any Loan Party of the Indebtedness of the Borrower and/or referred to in paragraph (r) or any Permitted Refinancing Indebtedness in respect thereof, (ii) by the Borrower or any Subsidiary Loan Party of any Indebtedness of the Borrower or any Subsidiary Loan Party expressly permitted to be incurred under this Agreement, (iii) by the Borrower or any Subsidiary Loan Party of Indebtedness otherwise expressly permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the extent such Guarantees are permitted by Section 6.04(b) and (iv) by any Foreign Subsidiary of Indebtedness of another Foreign Subsidiary; provided that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(l) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to such other Indebtedness to the same extent;
(m) Indebtedness arising from agreements of the Borrower or any Subsidiary providing for indemnification, adjustment of purchase or acquisition price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business or assets of the Borrower or a Subsidiary, other than Guarantees of Indebtedness incurred by any person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition;
(n) letters of credit or bank guarantees (other than Letters of Credit issued pursuant to Section 2.05) having an aggregate face amount not in excess of $5.0 million at any time outstanding;
(o) Indebtedness supported by a Letter of Credit, in a principal amount not in excess of the stated amount of such Letter of Credit; provided that such Indebtedness is promptly repaid with the proceeds of any drawing on such Letter of Credit;
(p) Indebtedness consisting of (ix) the financing of insurance premiums, premiums or (iiy) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed in connection with any acquisition or similar Investment permitted hereunder after the Closing Date; provided, that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date of Foreign Subsidiaries in an outstanding principal aggregate amount not to exceed $25.0 million at any time outstanding;
(r) unsecured Indebtedness consisting of Permitted Junior Debt and Permitted Refinancing Indebtedness in the aggregate respect thereof;
(s) all premium (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in paragraphs (a) the Fixed Incremental Amount plus through (bq) an additional amount so long as after giving effect thereto on a Pro Forma Basis as above; and
(t) Cash Management Obligations and other Indebtedness in respect of the last day of the most recently ended Test Periodnetting services, including the application of the proceeds thereof (overdraft protection and similar arrangements, in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith with cash management and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofdeposit accounts.
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Indebtedness. The Parent Borrower shall not, nor shall it permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or otherwise become or remain liable with respect to any Indebtedness, except:
(a) the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans);
(b) Indebtedness of the Parent Borrower to any Restricted Subsidiary and/or of any Restricted Subsidiary to the Parent Borrower and/or or any other Restricted Subsidiary; provided, provided that in the case of any Indebtedness of any Restricted Subsidiary that is not a Loan Party owing to the Borrowera Loan Party, such Indebtedness shall be permitted as an Investment under by Section 6.06; provided, further, provided further that any Indebtedness of the Borrower any Loan Party to any Restricted Subsidiary that is not a Loan Party must be unsecured and subject to the Global Intercompany Note or otherwise expressly subordinated to the Obligations of the Borrower such Loan Party on terms that are reasonably acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany NoteAgent);
(c) [reserved]Indebtedness in respect of (i) the 2025 Senior Unsecured Notes (including any guarantees thereof) and (ii)(A) any ABL Facility (including any letters of credit issued thereunder) in an aggregate outstanding principal (or committed) amount not to exceed the greater of (x) $250,000,000 and (y) the Borrowing Base and (B) any “Banking Services Obligations” and “Secured Hedging Obligations”, as such terms are defined in the ABL Credit Agreement or any equivalent term in any other ABL Facility;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Existing Credit Agreement Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Parent Borrower or any such Restricted Subsidiary pursuant to any such agreement;
(e) Indebtedness of the Parent Borrower and/or any Restricted Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing items;
(f) Indebtedness of the Parent Borrower and/or any Restricted Subsidiary in respect of Banking Services commercial credit cards, stored value cards, purchasing cards, treasury management services, netting services, overdraft protections, check drawing services, automated payment services (including depository, overdraft, controlled disbursement, ACH transactions, return items and interstate depository network services), employee credit card programs, cash pooling services and any arrangements or services similar to any of the foregoing and/or otherwise in connection with Cash management and Deposit Accounts, including Banking Services Obligations and dealer incentive, supplier finance or similar programs;
(g) (i) guaranties by the Parent Borrower and/or any Restricted Subsidiary of the obligations of suppliers, distributors, resellers, customers, customers and licensees and sublicensees in the ordinary course of business, (ii) Indebtedness incurred in the ordinary course of business in respect of obligations of the Parent Borrower and/or any Restricted Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods and services and (iii) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payables, warehouse receipts or similar facilities entered into in the ordinary course of business;
(h) Guarantees by the Parent Borrower and/or any Restricted Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary Parent Borrower and/or any joint venture Restricted Subsidiary with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary not prohibited by this Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary)Agreement; provided, provided that in the case of any Guarantee by the Borrower any Loan Party of the obligations of any Subsidiary of the Borrower or of any joint venturenon-Loan Party, the related Investment is permitted under Section 6.06;
(i) Indebtedness of the Parent Borrower and/or any Restricted Subsidiary existing, or pursuant to commitments existing, on the Existing Credit Agreement Closing Date; provided, that any such Indebtedness in excess of $5,000,000 shall be Date and described on Schedule 6.01;
(j) Surety Bond IndebtednessIndebtedness of Restricted Subsidiaries that are not Loan Parties; provided that the aggregate outstanding principal amount of such Indebtedness shall not exceed (together with all Indebtedness incurred under Section 6.01(n) or Section 6.01(w) by Restricted Subsidiaries that are not Loan Parties) the greater of $160,000,000 and 4.0% of Consolidated Total Assets as of the last day of the most recently ended Test Period;
(k) Indebtedness of the Parent Borrower and/or any Restricted Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense license or similar agreements entered into in the ordinary course of business;
(l) Indebtedness 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 each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Parent Borrower and/or any Restricted Subsidiary with respect to Capital Leases and purchase money Indebtedness incurred prior to or within 270 days of the acquisition, lease, completion of construction, repair of, replacement, improvement to or installation of assets in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 160,000,000 and 354.0% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Restricted Subsidiary or Indebtedness assumed in connection with any an acquisition or similar Investment permitted hereunder after the Closing Date; provided, provided that (i) such Indebtedness (A) existed at the time such Person became a Restricted Subsidiary or the assets subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereof, (ii) no Event of Default exists or would result after giving pro forma effect to such acquisition, (iii) after giving effect to such acquisition on a Pro Forma Basis (without “netting” the Cash proceeds of such Indebtedness), (A) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien securing the Credit Facilities, the Senior Secured Leverage Ratio would not exceed the greater of (x) 4.50:1.00 and (iiy) the Senior Secured Leverage Ratio as of the last day of the most recently ended Test Period, (B) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien securing the Credit Facilities, the Secured Leverage Ratio would not exceed the greater of (x) 5.00:1.00 and (y) the Secured Leverage Ratio as of the last day of the most recently ended Test Period, or (C) if such Indebtedness is unsecured or is secured by assets of Restricted Subsidiaries that are not Loan Parties, either (1) the Fixed Charge Coverage Ratio would not be less than the lesser of (x) 2.00:1.00 and (y) the Fixed Charge Coverage Ratio as of the last day of the most recently ended Test Period or (2) the Total Leverage Ratio would not exceed the greater of (x) 6.00:1.00 and (y) the Total Leverage Ratio as of the last day of the most recently ended Test Period, and (iv) the aggregate outstanding principal amount of such Indebtedness does of Restricted Subsidiaries that are not Loan Parties shall not exceed (together with all Indebtedness incurred under Section 6.01(j) or Section 6.01(w) by Restricted Subsidiaries that are not Loan Parties) the greater of $20,000,000 160,000,000 and 254.0% of Consolidated Adjusted EBITDA Total Assets as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by Holdings, the Parent Borrower or any Restricted Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Parent Borrower or any Subsidiary subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) the Parent Borrower and its Restricted Subsidiaries may become and remain liable for any Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (c), (i), (j), (m), (n), (o), (q), (r), (t), (u), (w), (x), (y), (z), ) and (bb) and/or (ffii) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; provided, that:
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, penalties 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 and the related refinancing transactionreplacement, (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, provided that (1) any additional Indebtedness referenced in this clause (C) satisfies the other applicable requirements of this definition (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) other than in the case of Refinancing Indebtedness with respect to clauses clause (i), (j), (m), (n), (u), ) or (x), (yA) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to on or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
replaced, (iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, excluding pricing, fees, premiums, rate floors, optional prepayment, prepayment or redemption terms or (and, if applicable, subordination terms terms) and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or any other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced Latest Maturity Date as of such date, (B) date or any covenants or provisions which reflect are then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders orIndebtedness), as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (mj), (n), (q) (solely as it relates to the Fixed Incremental Amount), (rm), (u), (w) (solely as it relates to clause (1) of the Fixed Incremental Amount), proviso thereto) and (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
clause, (v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.016.01 (it being understood that Holdings may not be the primary obligor of the applicable Refinancing Indebtedness if Holdings was not the primary obligor on the relevant refinanced Indebtedness), (A) such Indebtedness, if secured, Indebtedness is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly originally contractually subordinated to the Obligations in right of paymentpayment (or the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Secured Obligations), (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, payment (or (2) if the Liens securing such Refinancing Indebtedness is not contractually are subordinated to the Obligations in right of payment, Liens on the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(bCollateral securing the Secured Obligations) on terms not materially less favorable (other than Section 6.04(b)(i)as reasonably determined by the Borrower), and taken as a whole, to the Lenders than those applicable to the Indebtedness (Dor Liens, as applicable) being refinanced, refunded or replaced, taken as a whole, (vi) except in the case of Refinancing Indebtedness with respect to clause (a) of this Section 6.01, as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
exists and (vivii) in the case of Replacement DebtRefinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, provided that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person other than a Loan Party and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien first lien basis with respect to the Collateral may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in (x) any voluntary or mandatory prepayment in respect of the Initial Term Loans as set forth in Section 2.11(a)(i) (and (y) any mandatory prepayment of Additional Term Loans then subject to ratable repayment requirements), in each case as set forth in Section 2.11(b)(vii)the Parent Borrower and the relevant lender may agree;
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment acquisitions permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate Date; provided that (ai) the Fixed Incremental Amount plus (b) an additional amount so long as before and after giving effect thereto to such acquisition on a Pro Forma Basis, no Event of Default exists, (ii) after giving effect to such acquisition on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash Cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereofsuch Indebtedness), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(iA) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basisCredit Facilities, the First Lien Senior Secured Leverage Ratio does would not exceed 3.40:1.00;
the greater of (iix) 4.50:1.00 and (y) the Senior Secured Leverage Ratio as of the last day of the most recently ended Test Period, (B) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basisCredit Facilities, the Secured Leverage Ratio does would not exceed 3.90:1.00; or
the greater of (iiix) 5.00:1.00 and (y) the Secured Leverage Ratio as of the last day of the most recently ended Test Period, or (C) if such Indebtedness is unsecuredunsecured or is secured by assets of Restricted Subsidiaries that are not Loan Parties, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Fixed Charge Coverage Ratio is not would be no less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists lesser of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) 2.00:1.00 and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than Fixed Charge Coverage Ratio as of the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds last day of
Appears in 1 contract
Sources: Term Loan Credit Agreement (PQ Group Holdings Inc.)
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or suffer to exist or otherwise become or remain liable with in respect to of any Indebtedness, exceptexcept that the following shall be permitted:
(a) Indebtedness under the Secured Obligations (including any Additional Term Loans and any Additional Opco Revolving Facility Repayment Term Loans)Loan Documents;
(b) Indebtedness of existing on the Borrower to any Subsidiary and/or Effective Date and set forth in Schedule 6.01 and extensions, renewals and replacements of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any such Indebtedness with Indebtedness of any Subsidiary owing to a similar type that does not increase the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) (including pursuant to an Intercompany Note)outstanding principal amount thereof;
(c) [reserved]Indebtedness in respect of Capital Lease Obligations and Purchase Money Obligations for fixed or capital assets within the limitations set forth in Section 6.02(d), and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided, however, that the aggregate principal amount of all Indebtedness permitted by this Section 6.01(c) shall not exceed $15,000,000 at any one time outstanding;
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant Regulated Insurance Company under Swap Obligations to any such agreementthe extent permitted by Section 6.06;
(e) Indebtedness of the Borrower and/or any Subsidiary (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 ordinary course of business and (ii) in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsconstituting Investments permitted by Section 6.04(d);
(f) Indebtedness arising from the honoring by a bank or other financial institution of the Borrower and/or any Subsidiary in respect of Banking Services and/or otherwise in connection with Cash management and Deposit Accountsa check, including incentive, supplier finance draft or similar programsinstrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of its incurrence;
(g) (i) guaranties by Indebtedness resulting from the Borrower and/or any Subsidiary endorsements of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees instruments for deposit in the ordinary course of business, (ii) Indebtedness incurred in to the ordinary course of business extent constituting Indebtedness, obligations in respect of obligations of the Borrower and/or any Subsidiary to pay the deferred purchase price of goods or services or progress payments in connection with such goods purchasing card and services credit card arrangements and (iii) Indebtedness of the Borrower or any Subsidiary in respect of letters of creditperformance bonds, bankers’ acceptancesappeal bonds, bank guaranties or surety bonds and similar instruments supporting trade payablesobligations, warehouse receipts or similar facilities entered into in each case, incurred in the ordinary course of business;
(h) Guarantees by the Borrower and/or any Subsidiary of Indebtedness or other obligations of the Borrower, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower or such Subsidiary, as applicable, or other repurchase obligations of the Borrower and/or or any Subsidiary not prohibited by this Regulated Insurance Company under any Repurchase Agreement (and not prohibited to be incurred by the Borrower or such Subsidiary); provided, that in the case of any Guarantee by the Borrower of the obligations of any Subsidiary Repurchase Liability of the Borrower or any Regulated Insurance Company; provided, however, that the aggregate amount of all such obligations and Repurchase Liabilities permitted by this Section 6.01(h) shall not exceed $150,000,000 at any joint venture, the related Investment is permitted under Section 6.06time outstanding;
(i) Indebtedness which represents an extension, refinancing or renewal of any of the Indebtedness described in Section 6.01(j), (k) or (l); provided that, (i) the aggregate principal amount of such Indebtedness is not greater than the aggregate principal amount of the Indebtedness so extended, refinanced or renewed, (ii) the interest rate of such Indebtedness is not higher than the interest rate of the Indebtedness so extended, refinanced or renewed (other than an increase of such interest rate to the then current market interest rate for such type of Indebtedness, as applicable), (iii) such Indebtedness may be secured by the Liens that secured the Indebtedness so extended, refinanced or renewed; provided such Liens do not extend to any additional property of the Borrower and/or or any Subsidiary, (iv) no Subsidiary existingis required to become obligated with respect thereto unless previously obligated on such refinanced Indebtedness, (v) such Indebtedness does not result in a shortening of the maturity of the Indebtedness so extended, refinanced or pursuant to commitments existingrenewed, on (vi) the Closing Date; provided, that terms of any such Indebtedness are not less favorable to the obligor thereunder than the original terms of the Indebtedness so extended, refinanced or renewed and (vii) if the Indebtedness that is extended, refinanced or renewed was subordinated in excess right of $5,000,000 shall be described on Schedule 6.01payment to the Obligations, then the terms and conditions of the extension, refinancing or renewal Indebtedness must include subordination terms and conditions that are at least as favorable to the Lenders as those that were applicable to the Indebtedness so extended, refinanced or renewed;
(j) Surety Bond Indebtedness;
(k) Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory in connection with customer financing arrangements in the ordinary course of business;
(m) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in an aggregate outstanding principal amount not to exceed the greater of $52,850,000 and 35% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(n) Indebtedness of any a Person that becomes a Subsidiary or Indebtedness assumed attaching to assets that are acquired by the Borrower or any of its Subsidiaries, in each case after the Effective Date in connection with a Permitted Acquisition, and any acquisition or similar Investment permitted hereunder after the Closing Dateextensions, refinancings and renewals of such Indebtedness in accordance with Section 6.01(i); provided, provided that (i) such Indebtedness (A) existed at the time such Person became a Subsidiary or at the time such assets subject to such Indebtedness were acquired and (B) and, in each case, was not created in contemplation of or incurred in anticipation thereofconnection with such Permitted Acquisition, and (ii) the aggregate outstanding principal amount of such Indebtedness does is not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued guaranteed in any respect by the Borrower or any Subsidiary (other than by any such Person that so becomes a Subsidiary), (iii) no Default or Event of Default has occurred and is continuing prior to the assumption of such Indebtedness or would arise after giving effect (including giving effect on a pro forma basis) thereto and (iv) the sum of the aggregate principal amount of Indebtedness permitted by this clause (j) and clause (k) below shall not exceed $20,000,000 at any time outstanding;
(k) unsecured Indebtedness in respect of obligations to make Deferred Acquisition Payments, and extensions, refinancings and renewals of such Indebtedness in accordance with Section 6.01(i); provided that the sum of the aggregate amount of Indebtedness permitted by this clause (k) and clause (j) above shall not exceed $20,000,000 at any time outstanding; provided further that, if the aggregate amount of all such obligations to make Deferred Acquisition Payments exceeds $10,000,000 at any one time, then such excess amount shall be subordinated to the Obligations on terms and conditions, and pursuant to documentation, reasonably satisfactory to the Administrative Agent; provided, further, that any payments in respect of such Indebtedness shall be subject to Sections 6.07(b) and 6.13(a)(iii);
(l) in the case of Reliant, the Reliant Indebtedness and any extension, refinancing or renewal of any of such Reliant Indebtedness in accordance with Section 6.01(i); provided that (i) the aggregate principal amount of the Reliant Indebtedness shall not exceed $1,500,000 outstanding at any time, and (ii) any payments in respect of such Reliant Indebtedness shall be subject to Section 6.13(a)(ii);
(m) with respect to any stockholder Specified Life Settlement Subsidiary, any Indebtedness or obligations of such Specified Life Settlement Subsidiary; provided that neither the Borrower nor any Parent Company Subsidiary shall be liable, directly or indirectly, for any such Indebtedness or obligations or otherwise give security therefor;
(n) FHLB Loans incurred in the ordinary course of business and on customary terms and conditions; provided that the aggregate principal amount of Indebtedness permitted by this clause (n) shall not exceed $20,000,000 at any time outstanding;
(o) Guarantees by any Subsidiary of the Borrower in respect of Indebtedness otherwise permitted hereunder of the Borrower or any current or former directorother Subsidiary of the Borrower; provided, officerthat if the Indebtedness that is being guaranteed is unsecured and/or subordinated to the Obligations, employeethe guaranty shall also be unsecured and/or subordinated to the Obligations; provided further that the aggregate principal amount of Guarantees permitted by this clause (o) shall not exceed $10,000,000 at any time outstanding; and
(p) other unsecured Indebtedness of the Borrower and its Subsidiaries (including, member for the avoidance of managementdoubt, manager or consultant Indebtedness of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Refinancing Indebtedness in respect thereof; 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) as an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred account party in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date letters of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(ivcredit) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect thereto, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding aggregate principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto on a Pro Forma Basis as of the last day of the most recently ended Test Period, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of exceeding $25,000,000 at any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the First Lien Leverage Ratio does not exceed 3.40:1.00;
(ii) if such Indebtedness is secured by a Lien on the Collateral that is junior to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
(iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2) the Interest Coverage Ratio is not less than 2.25:1.00;
(iv) provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) shall not be shorter than the Weighted Average Life to Maturity of any then-existing Class of Term Loans (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds oftime outstanding.
Appears in 1 contract
Indebtedness. The Borrower shall not, nor shall it permit any of its Subsidiaries to, directly or indirectlyIncur, create, incur, assume or otherwise become or remain liable with respect permit to exist any Indebtedness, except:
(a) (i) Indebtedness existing or committed on the Secured Obligations Closing Date (including provided, that any Additional Term Loans such Indebtedness that is (x) not intercompany Indebtedness and (y) in excess of $5,000,000 shall be set forth on Schedule 6.01) and (ii) any Additional Opco Revolving Facility Repayment Term LoansPermitted Refinancing Indebtedness incurred to Refinance such Indebtedness (other than intercompany Indebtedness Refinanced with Indebtedness owed to a person not affiliated with the Borrower or any Subsidiary);
(b) (i) Indebtedness of the Borrower to any Subsidiary and/or of any Subsidiary to the Borrower and/or any other Subsidiary; provided, that in the case of any Indebtedness of any Subsidiary owing to the Borrower, such Indebtedness shall be permitted as an Investment under Section 6.06; provided, further, that any Indebtedness of the Borrower to any Subsidiary must be unsecured and expressly subordinated to the Obligations of the Borrower on terms that are acceptable to the Administrative Agent (acting at the direction of the Required Lenders, acting reasonably) created hereunder (including pursuant to an Intercompany Note)Section 2.21) and under the other Loan Documents and (ii) any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness;
(c) [reserved];
(d) Indebtedness arising from any agreement providing for indemnification, adjustment of purchase price or similar obligations (including contingent earn-out obligations) incurred in connection with any Disposition permitted hereunder, any acquisition permitted hereunder or consummated prior to the Closing Date or any other purchase of assets or Capital Stock, and Indebtedness arising from guaranties, letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments securing the performance of the Borrower or any Subsidiary pursuant to Hedging Agreements entered into for non-speculative purposes;
(d) Indebtedness owed to (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) any person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance to the Borrower or any Subsidiary, pursuant to reimbursement or indemnification obligations to such agreementperson, in each case in the ordinary course of business or consistent with past practice or industry practices;
(e) Indebtedness of any Subsidiary of the Borrower and/or to the Borrower or any other Subsidiary of the Borrower; provided, that Indebtedness of any Subsidiary (i) that is not a Doc#: US1:15347125v11 Subsidiary Loan Party owing to the Loan Parties incurred pursuant to tendersthis Section 6.01(e) shall be subject to Section 6.04;
(f) Indebtedness in respect of performance bonds, statutory bid bonds, appeal bonds, surety bonds and completion guarantees and similar obligations, bidsin each case provided in the ordinary course of business or consistent with past practice or industry practices, leasesincluding those incurred to secure health, governmental contracts, trade contracts, surety, stay, customs, appeal, performance and/or return safety and environmental obligations in the ordinary course of money bonds business or consistent with past practice or industry practices;
(g) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar obligations instrument drawn against insufficient funds in the ordinary course of business or other cash management services, in each case incurred in the ordinary course of business business;
(i) Indebtedness of a Subsidiary acquired after the Closing Date or a person merged or consolidated with the Borrower or any Subsidiary after the Closing Date and Indebtedness otherwise incurred or assumed by the Borrower or any Subsidiary in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition or other permitted Investment), where such acquisition, merger or consolidation is not prohibited by this Agreement; provided, that, (w) in the case of any such Indebtedness secured by Liens on Collateral that are Other First Liens, the Net First Lien Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than the greater of (I) 3.00 to 1.00 and (II) the Net First Lien Leverage Ratio in effect immediately prior thereto, (x) in the case of any such Indebtedness secured by Liens on Collateral that are Junior Liens, the Net Secured Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than the greater of (I) 4.00 to 1.00 and (II) the Net Secured Leverage Ratio in effect immediately prior thereto, (y) in the case of any Indebtedness that is unsecured or secured by assets that are not Collateral, (I) the Interest Coverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not less than the lesser of (A) 2.00 to 1.00 or (B) the Interest Coverage Ratio in effect immediately prior thereto or (II) the Net Total Leverage Ratio on a Pro Forma Basis immediately after giving effect to such acquisition, merger or consolidation, the incurrence or assumption of such Indebtedness and the use of proceeds thereof and any related transactions is not greater than the greater of (A) 5.00 to 1.00 and (B) the Net Total Leverage Ratio in effect immediately prior thereto and (z) in the case of any such Indebtedness incurred under this clause (h) by a Subsidiary other than a Subsidiary Loan Party that is incurred in contemplation of such acquisition, merger or consolidation, the aggregate outstanding principal amount of such Indebtedness immediately after giving effect to such acquisition, merger or consolidation, the incurrence of such Indebtedness and the use of proceeds thereof and any related transactions shall not exceed, when taken together with the aggregate principal amount of any other Indebtedness outstanding at such time pursuant to Section 6.01(q)(i), Section 6.01(r)(i), Section 6.01(s)(i) and Section 6.01(z)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $62,500,000 and 0.25 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period; provided, further, that the incurrence of any Indebtedness for borrowed money pursuant to this clause (h)(i) shall be subject to the last paragraph of this Section 6.01 and (ii) any Permitted Refinancing Indebtedness incurred to Refinance any such Indebtedness;
(i) (i) Financing Lease Obligations, purchase money or mortgage financings and other Indebtedness incurred by the Borrower or any Subsidiary prior to or within 270 days Doc#: US1:15347125v11 after the acquisition, lease, construction, repair, replacement or improvement of the respective property (real or personal, and whether through the direct purchase of property or the Equity Interest of any person owning such property) permitted under this Agreement in order to finance such acquisition, lease, construction, repair, replacement or improvement, in an aggregate principal amount that immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(i)(i), would not exceed the greater of $75,000,000 and 0.30 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, (ii) Financing Lease Obligations Incurred by the Borrower or any Subsidiary to finance (whether prior to or within 270 days after) the acquisition, lease, construction, repair, replacement or improvement of computer equipment (including servers), storage equipment, networking equipment and other equipment and similar assets related to the business of the Borrower and the Subsidiaries and any finance lease obligations not prohibited hereunder and (iii) any Permitted Refinancing Indebtedness in respect of letters of credit, bank guaranties, surety bonds, performance bonds or similar instruments to support any of the foregoing itemsforegoing;
(fi) Financing Lease Obligations and any other Indebtedness incurred by the Borrower or any Subsidiary arising from any Sale and Lease-Back Transaction that is permitted under Section 6.03, (ii) Financing Lease Obligations or other obligations or deferrals attributable to capital spending and (iii) any Permitted Refinancing Indebtedness in respect of the foregoing;
(i) other Indebtedness of the Borrower or any Subsidiary, in an aggregate principal amount that, immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof, together with the aggregate principal amount of any other Indebtedness outstanding pursuant to this Section 6.01(k), would not exceed the greater of $100,000,000 and 0.40 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period, and (ii) any Permitted Refinancing Indebtedness in respect thereof (this clause (k), the “General Debt Basket”);
(l) Indebtedness of the Borrower and/or or any Subsidiary in respect an aggregate outstanding principal amount up to the aggregate amount of Banking Services and/or otherwise net cash proceeds received after the Closing Date by the Borrower from (x) the issuance or sale of its Qualified Equity Interests (or shareholder loans on terms reasonably acceptable to the Administrative Agent) or (y) a cash contribution to its common equity with the net cash proceeds from the issuance and sale by Holdings or Parent of its Qualified Equity Interests (or shareholder loans on terms reasonably acceptable to the Administrative Agent) or a cash contribution to its common equity (in connection with Cash management each case of (x) and Deposit Accounts(y), including incentiveother than proceeds from the sale of Equity Interests to, supplier finance or similar programscontributions from, the Borrower or any of its Subsidiaries), to the extent such net cash proceeds do not constitute Excluded Contributions or Permitted Cure Securities and were not included in the calculation of the Cumulative Credit;
(m) Guarantees (i) guaranties by Holdings, the Borrower and/or or any Subsidiary Loan Party of any Indebtedness of the obligations of suppliers, distributors, resellers, customers, licensees and sublicensees in the ordinary course of businessBorrower or any Subsidiary Loan Party permitted to be incurred by it under this Agreement, (ii) by the Borrower or any Subsidiary Loan Party of Indebtedness incurred in otherwise permitted hereunder of any Subsidiary that is not a Subsidiary Loan Party to the ordinary course extent such Guarantees are permitted by Section 6.04 (other than Section 6.04(v)) and (iii) by any Subsidiary that is not a Subsidiary Loan Party of business in respect Indebtedness of obligations another Subsidiary that is not a Subsidiary Loan Party; provided, that Guarantees by the Borrower or any Subsidiary Loan Party under this Section 6.01(m) of any other Indebtedness of a person that is subordinated to other Indebtedness of such person shall be expressly subordinated to the Loan Obligations to at least the same extent as such underlying Indebtedness is subordinated; Doc#: US1:15347125v11
(n) Indebtedness arising from agreements of the Borrower and/or or any Subsidiary to pay the deferred providing for indemnification, adjustment of purchase or acquisition price of goods or services similar obligations (including earn-outs), in each case, incurred or progress payments assumed in connection with such goods and services and the Transactions, any Permitted Business Acquisition, other Investments or the disposition of any business, assets or a Subsidiary not prohibited by this Agreement;
(iiio) Indebtedness in respect of letters of credit, bankers’ acceptances, bank guaranties or similar instruments supporting trade payablesguarantees, warehouse receipts or similar facilities entered into instruments issued to support performance obligations and trade-related letters of credit (other than obligations in respect of other Indebtedness) in the ordinary course of businessbusiness or consistent with past practice or industry practices;
(hp) Guarantees Indebtedness of Loan Parties arising from Permitted Bridge-to Securitization Financing, so long as immediately after giving effect to the incurrence of such Indebtedness and the use of proceeds thereof and all contemporaneous transactions entered into in connection therewith, the Net Secured Leverage Ratio on a Pro Forma Basis is not greater than 4.00 to 1.00;
(i) Indebtedness secured by Liens on Collateral that are Other First Liens so long as immediately after giving effect to the Borrower and/or any Subsidiary incurrence of such Indebtedness and the use of proceeds thereof, the Net First Lien Leverage Ratio on a Pro Forma Basis is not greater than 3.00 to 1.00 (or, if such Indebtedness is incurred in connection with the acquisition of assets or other obligations of the BorrowerEquity Interests (including a Permitted Business Acquisition and including through a merger or consolidation) or an Investment, any Subsidiary and/or any joint venture with respect to Indebtedness otherwise permitted to be incurred pursuant to this Section 6.01 by the Borrower where such acquisition, merger, consolidation or such Subsidiary, as applicable, or other obligations of the Borrower and/or any Subsidiary Investment is not prohibited by this Agreement (including the acquisition of Securitization Assets of or by a Securitization Entity that are or will in twelve months be subject to a Permitted Securitization Financing), than the greater of (I) 3.00 to 1.00 and not prohibited to be incurred by (II) the Borrower or such SubsidiaryNet First Lien Leverage Ratio in effect immediately prior thereto); provided, that in (x) the case aggregate principal amount of Indebtedness outstanding under this clause (q)(i) at such time that is incurred by a Subsidiary other than a Subsidiary Loan Party shall not exceed, when taken together with the aggregate principal amount of any Guarantee other Indebtedness outstanding pursuant to Section 6.01(h)(i) (to the extent set forth therein), this Section 6.01(q)(i), Section 6.01(r)(i), Section 6.01(s)(i) and Section 6.01(z)(i) that are incurred by Subsidiaries other than the Borrower Subsidiary Loan Parties, the greater of $62,500,000 and 0.25 times the obligations EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any Subsidiary Indebtedness for borrowed money pursuant to this clause (q)(i) shall be subject to the last paragraph of the Borrower or of this Section 6.01, and (ii) any joint venture, the related Investment is permitted under Section 6.06Permitted Refinancing Indebtedness in respect thereof;
(i) Indebtedness secured by Liens on Collateral that are Junior Liens so long as immediately after giving effect to the incurrence of the Borrower and/or any Subsidiary existing, or pursuant to commitments existing, on the Closing Date; provided, that any such Indebtedness in excess and the use of $5,000,000 shall be described proceeds thereof, the Net Secured Leverage Ratio on Schedule 6.01;
a Pro Forma Basis is not greater than 4.00 to 1.00 (j) Surety Bond Indebtedness;
(k) or if such Indebtedness of the Borrower and/or any Subsidiary consisting of obligations owing under incentive (including dealer incentive), supply, distribution, resale, vendor, license, sublicense or similar agreements entered into in the ordinary course of business;
(l) Indebtedness of the Borrower and/or any Subsidiary consisting of (i) the financing of insurance premiums, (ii) take-or-pay obligations contained in supply arrangements, in each case, in the ordinary course of business and/or (iii) obligations to reacquire assets or inventory is incurred in connection with customer financing arrangements in the ordinary course acquisition of business;
assets or Equity Interests (mincluding a Permitted Business Acquisition and including through a merger or consolidation) Indebtedness of the Borrower and/or any Subsidiary with respect to Capital Leases and purchase money Indebtedness in or an aggregate outstanding principal amount Investment, where such acquisition, merger, consolidation or Investment is not to exceed prohibited by this Agreement, the greater of $52,850,000 (I) 4.00 to 1.00 and 35% of Consolidated Adjusted EBITDA as of (II) the last day of the most recently ended Test Period;
(n) Indebtedness of any Person that becomes a Subsidiary or Indebtedness assumed Net Secured Leverage Ratio in connection with any acquisition or similar Investment permitted hereunder after the Closing Dateeffect immediately prior thereto); provided, that (ix) the aggregate principal amount of Indebtedness outstanding under this clause (r)(i) at such Indebtedness (A) existed at the time such Person became that is incurred by a Subsidiary or other than a Subsidiary Loan Party shall not exceed, when taken together with the assets aggregate principal amount of any other Indebtedness outstanding pursuant to Section 6.01(h)(i) (to the extent set forth therein), Section 6.01(q)(i), this Section 6.01(r)(i), Section 6.01(s)(i) and Section 6.01(z)(i) that are incurred by Subsidiaries other than the Subsidiary Loan Parties, the greater of $62,500,000 and 0.25 times the EBITDA calculated on a Pro Forma Basis for the then most recently ended Test Period and (y) the incurrence of any Indebtedness for borrowed money pursuant to this clause (r)(i) shall be subject to such Indebtedness were acquired and (B) was not created or incurred in anticipation thereofthe last paragraph of this Section 6.01, and (ii) the aggregate outstanding principal amount of such Indebtedness does not exceed the greater of $20,000,000 and 25% of Consolidated Adjusted EBITDA as of the last day of the most recently ended Test Period;
(o) Indebtedness consisting of promissory notes issued by the Borrower or any Subsidiary to any stockholder of any Parent Company or any current or former director, officer, employee, member of management, manager or consultant of any Parent Company, the Borrower or any Subsidiary (or their respective Immediate Family Members) to finance the purchase or redemption of Capital Stock of any Parent Company permitted by Section 6.04(a);
(p) Indebtedness refinancing, refunding or replacing any Indebtedness permitted under clauses (a), (i), (j), (m), (n), (q), (r), (u), (w), (y), (z), (bb) and/or (ff) of this Section 6.01 (in any case, including any refinancing Indebtedness incurred in respect thereof, “Refinancing Indebtedness”) and any subsequent Permitted Refinancing Indebtedness in respect thereof; provided, that:Doc#: US1:15347125v11
(i) the principal amount of such unsecured Indebtedness does or Indebtedness secured by assets that are not exceed the principal amount of the Indebtedness being refinanced, refunded or replaced, except by (A) an amount equal to unpaid accrued interest, penalties 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 and the related refinancing transaction, (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 definition (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) other than in the case of Refinancing Indebtedness with respect to clauses (i), (j), (m), (n), (u), (x), (y) and/or (bb) (other than Customary Bridge Loans or Customary Term A Loans), such Indebtedness has (A) a final maturity equal to or later than (and, in the case of revolving Indebtedness, does not require mandatory commitment reductions, if any, prior to) the earlier of (x) the Latest Maturity Date and (y) the final maturity of the Indebtedness being refinanced, refunded or replaced and (B) other than with respect to revolving Indebtedness, such Refinancing Indebtedness has (x) 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 (without Collateral so long as immediately after giving effect to any prepayment thereof) or (y) a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the outstanding Term Loans at such time,
(iii) the terms of any Refinancing Indebtedness with an original principal amount in excess of the Threshold Amount (excluding, to the extent applicable, pricing, fees, premiums, rate floors, optional prepayment, redemption terms or subordination terms and, with respect to Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) above, security), are not, taken as a whole (as reasonably determined by the Borrower), more favorable to the lenders providing such Indebtedness than those applicable to the Indebtedness being refinanced, refunded or replaced (other than (A) any covenants or other provisions applicable only to periods after the applicable maturity date of the debt then-being refinanced as of such date, (B) any covenants or provisions which reflect then-current market terms for the applicable type of Indebtedness or (C) any covenant or other provision which is conformed (or added) to the Loan Documents for the benefit of the Lenders or, as applicable, the Administrative Agent pursuant to an amendment to this Agreement effectuated in reliance on Section 9.02(d)(ii)),
(iv) in the case of Refinancing Indebtedness with respect to Indebtedness permitted under clauses (m), (n), (q) (solely as it relates to the Fixed Incremental Amount), (r), (u), (w) (solely as it relates to the Fixed Incremental Amount), (y), (z) (solely as it relates to the Fixed Incremental Amount), (bb) and/or (ff) (solely as it relates to the Fixed Incremental Amount) of this Section 6.01, the incurrence thereof shall be without duplication of any amounts outstanding in reliance on the relevant clause such that the amount available under the relevant clause shall be reduced by the amount of the applicable Refinancing Indebtedness,
(v) except in the case of Refinancing Indebtedness incurred in respect of Indebtedness permitted under clause (a) of this Section 6.01, (A) such Indebtedness, if secured, is secured only by Permitted Liens at the time of such refinancing, refunding or replacement (it being understood that secured Indebtedness may be refinanced with unsecured Indebtedness), and if the Liens securing such Indebtedness were originally contractually subordinated to the Liens on the Collateral securing the Initial Term Loans, the Liens securing such Indebtedness are subordinated to the Liens on the Collateral securing the Initial Term Loans on terms not materially less favorable (as reasonably determined by the Borrower), taken as a whole, to the Lenders than those (1) applicable to the Liens securing the Indebtedness being refinanced, refunded or replaced, taken as a whole or (2) set forth in any applicable Intercreditor Agreement, (B) such Indebtedness is incurred by the obligor or obligors in respect of the Indebtedness being refinanced, refunded or replaced, except to the extent otherwise permitted pursuant to this Section 6.01 (it being understood that any entity that was a guarantor in respect of the relevant refinanced Indebtedness may be the primary obligor in respect of the refinancing Indebtedness, and any entity that was the primary obligor in respect of the relevant refinanced Indebtedness may be a guarantor in respect of the refinancing Indebtedness), (C) if the Indebtedness being refinanced, refunded or replaced was expressly contractually subordinated to the Obligations in right of payment, (1) such Refinancing Indebtedness is contractually subordinated to the Obligations in right of payment, or (2) if such Refinancing Indebtedness is not contractually subordinated to the Obligations in right of payment, the purchase, defeasance, redemption, repurchase, repayment, refinancing or other acquisition or retirement of such Indebtedness is permitted under Section 6.04(b) (other than Section 6.04(b)(i)), and (D) as of the date of the incurrence of such Indebtedness and after giving effect theretothe use of proceeds thereof, no Event of Default exists, and
(vi) in the case of Replacement Debt, (A) such Indebtedness is pari passu or junior in right of payment and secured by the Collateral on a pari passu or junior basis with respect to the remaining Obligations hereunder, or is unsecured; provided, that any such Refinancing Indebtedness that is pari passu or junior with respect to the Collateral shall be subject to an Acceptable Intercreditor Agreement, (B) if the Indebtedness being refinanced, refunded or replaced is secured, it is not secured by any assets other than the Collateral, (C) if the Indebtedness being refinanced, refunded or replaced is Guaranteed, it shall not be Guaranteed by any Person and (D) such Refinancing Indebtedness is incurred under (and pursuant to) documentation other than this Agreement; it being understood and agreed that any such Refinancing Indebtedness that is pari passu with the Initial Term Loans hereunder in right of payment and secured by the Collateral on a pari passu basis with respect to the Secured Obligations hereunder that are secured on a First Priority Lien basis with respect to the Collateral may participate in either (x) any voluntary prepayment of Term Loans as set forth in Section 2.11(a)(i) and (y) any mandatory prepayment of Term Loans as set forth in Section 2.11(b)(vii);
(q) Indebtedness incurred by the Borrower to finance any acquisition or similar Investment permitted hereunder after the Closing Date in an outstanding principal amount not to exceed in the aggregate (a) the Fixed Incremental Amount plus (b) an additional amount so long as after giving effect thereto Interest Coverage Ratio on a Pro Forma Basis as of the last day of the most recently ended Test Periodis not less than 2.00 to 1.00 (or, including the application of the proceeds thereof (in each case, without “netting” the cash proceeds of the applicable Indebtedness being incurred and, in the case of any revolving indebtedness, assuming a full utilization thereof), giving effect to any related transaction in connection therewith and all customary pro forma events and adjustments (such Indebtedness, “Incurred Acquisition Debt”):
(i) if such Indebtedness is secured incurred in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition and including through a merger or consolidation) or an Investment, where such acquisition, merger, consolidation or Investment is not prohibited by this Agreement (including the acquisition of Securitization Assets of or by a Lien on the Collateral that is pari passu with the Lien on the Collateral securing the Secured Obligations Securitization Entity that are secured on or will in twelve months be subject to a First Priority Lien basisPermitted Securitization Financing), than the First Lien Leverage Ratio does not exceed 3.40:1.00;
lesser of (iiI) if such Indebtedness is secured by a Lien on the Collateral that is junior 2.00 to the Lien on the Collateral securing the Secured Obligations that are secured on a First Priority Lien basis, the Secured Leverage Ratio does not exceed 3.90:1.00; or
1.00 and (iii) if such Indebtedness is unsecured, either (1) the Total Leverage Ratio does not exceed 3.90:1.00 or (2II) the Interest Coverage Ratio in effect immediately prior thereto) or (y) the Net Total Leverage Ratio on a Pro Forma Basis is not less greater than 2.25:1.00;
5.00 to 1.00 (ivor, if such Indebtedness is incurred in connection with the acquisition of assets or Equity Interests (including a Permitted Business Acquisition and including through a merger or consolidation) or an Investment, where such acquisition, merger, consolidation or Investment is not prohibited by this Agreement (including the acquisition of Securitization Assets of or by a Securitization Entity that are or will in twelve months be subject to a Permitted Securitization Financing), than the greater of (I) 5.00 to 1.00 and (II) the Net Total Leverage Ratio in effect immediately prior thereto); provided, that:
(A) the MFN Provision shall apply to any Incurred Acquisition Debt that constitutes MFN Indebtedness, and
(B) if such Incurred Acquisition Debt consists of Indebtedness for borrowed money or Indebtedness of the kind described in clause (c) of the definition thereof:
(C) (x) the Weighted Average Life to Maturity applicable to aggregate principal amount of Indebtedness outstanding under this clause (s)(i) at such Incurred Acquisition Debt (time that is incurred by a Subsidiary other than Customary Bridge Loans or Customary Term A Loans) a Subsidiary Loan Party shall not be shorter than exceed, when taken together with the Weighted Average Life to Maturity aggregate principal amount of any then-existing Class of Term Loans other Indebtedness outstanding pursuant to Section 6.01(h)(i) (without giving effect to any prepayment that would otherwise modify the Weighted Average Life to Maturity of such Term Loans) and (y) the final maturity date with respect to such Incurred Acquisition Debt (other than Customary Bridge Loans or Customary Term A Loans) is no earlier than the Latest Maturity Date applicable to any then-existing Term Loan, as applicable, thereof;
(D) subject to clause (1) above, such Incurred Acquisition Debt may otherwise have an amortization schedule as determined by the Borrower and the lenders providing such Incurred Acquisition Debt, and
(E) such Incurred Acquisition Debt (x) may rank pari passu with or junior to any then-existing Class of Term Loans in right of payment and/or security or may be unsecured; provided, that, to the extent the relevant Incurred Acquisition Debt is secured, it may not be secured by any assets other than the Collateral (other than with respect to proceeds ofto
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